• Contact us
  • About us
  • Digital edition
  • Online archive
Monday, June 2, 2025
Social icon element need JNews Essential plugin to be activated.
Cumberland and Westmorland Herald
  • News
    142178

    Multiple fire crews tackle roof fire in Crosby Ravensworth

    142165

    Free domestic abuse support drop-in service launches in Penrith

    142123

    Penrith bar relaunched with vibrant events planned

    142119

    Penrith Beacon access closed after vandalism

    142011

    Fire crews spend six hours tackling blaze at timber firm’s headquarters

    141750

    £15 million luxury care home plans for Penrith

    141382

    Changes to business rates

    141490

    Tesco Express opens doors in Penrith

    141441

    Nursing award for Penrith’s Fay Dudson

  • Sport
    142126

    Penrith teen crowned British vault champion

    141451

    Penrith gymnasts represent North of England in finals

    141095

    New boss revealed for Penrith AFC

    141045

    Penrith Panthers celebrate winning season

    139837

    Darren Edmondson leaves Penrith AFC

    137888

    Lucy plays key role in county T20 triumph

    136783

    Gold for Keith in annual festival of orienteering

    136081

    Cumberland and Westmorland wrestlers head to European championships

    133324

    Kirkby Stephen Hockey Club win league title

  • Obituaries
  • Nostalgia
  • Online archive
  • Buy Photos
  • Buy your paper
  • North Lakes Living
No Result
View All Result
Cumberland and Westmorland Herald
  • News
    142178

    Multiple fire crews tackle roof fire in Crosby Ravensworth

    142165

    Free domestic abuse support drop-in service launches in Penrith

    142123

    Penrith bar relaunched with vibrant events planned

    142119

    Penrith Beacon access closed after vandalism

    142011

    Fire crews spend six hours tackling blaze at timber firm’s headquarters

    141750

    £15 million luxury care home plans for Penrith

    141382

    Changes to business rates

    141490

    Tesco Express opens doors in Penrith

    141441

    Nursing award for Penrith’s Fay Dudson

  • Sport
    142126

    Penrith teen crowned British vault champion

    141451

    Penrith gymnasts represent North of England in finals

    141095

    New boss revealed for Penrith AFC

    141045

    Penrith Panthers celebrate winning season

    139837

    Darren Edmondson leaves Penrith AFC

    137888

    Lucy plays key role in county T20 triumph

    136783

    Gold for Keith in annual festival of orienteering

    136081

    Cumberland and Westmorland wrestlers head to European championships

    133324

    Kirkby Stephen Hockey Club win league title

  • Obituaries
  • Nostalgia
  • Online archive
  • Buy Photos
  • Buy your paper
  • North Lakes Living
No Result
View All Result
Cumberland and Westmorland Herald
No Result
View All Result
Home Latest
This article appears as part of a paid partnership with Armstong Watson

Can I help my children through the cost of living crisis and save on inheritance tax too?

by CWH
21 September 2022
in Latest, Sponsored
A A
Share on FacebookShare on Twitter

By Paul Moody, financial planning consultant, Armstrong Watson LLP

The majority of working years are spent building up savings and pensions to enjoy in retirement, and for many people, their wish is to pass what is left to children and grandchildren.

Traditionally wealth is inherited by family members after a loved one has passed away, with the most effective method of doing so by having written a will where your wishes are conveyed.

Perhaps you have written your will, and done some planning to mitigate the inheritance tax your beneficiaries may pay on your death. But could the cost-of-living crisis now be encouraging you to think differently?

Financially supporting your adult children and grandchildren

With media speculation about those on reasonable incomes unable to afford to pay energy bills, and reports of inflation potentially exceeding 18 per cent, you may be considering that now could be the time to step in to help your offspring.

The good news Is, that giving your children or grandchildren money while you are alive could be the most tax-efficient way to be the Bank of Mum and Dad during the cost-of-living crisis and could mean that you help your children now when they need it most.

What are the benefits of gifting a living inheritance?

There are numerous benefits to giving assets away while living:

Making gifts while you are alive lowers the value of your estate for Inheritance Tax (IHT) purposes

IHT is payable at 40 per cent on any wealth above a certain threshold, known as the nil-rate band. This is currently frozen at £325,000. If you plan to pass on your home, you can make use of the residence nil-rate band, currently frozen at £175,000.

You can gift any amount you like during your lifetime

Your loved ones will only pay IHT on a gift if your estate becomes liable for it, and you die within seven years of making the gift. This is known as the seven-year rule.

If you die between three and seven years after making the gift, the rate payable will be based on a sliding scale known as taper relief.

Tax-free exemptions to some types of gifting

There are some HMRC exemptions to giving gifts that are tax-free regardless of how long you survive after gifting. These include the:

  • Annual Exemption, which allows you to gift £3,000 a year tax-free, with the option to carry forward any unused amount for up to one year.
  • Normal expenditure out of income exemption, which allows you to make regular gifts as long as they are made from income and don’t affect your standard of living.

Personal benefits to gifting now rather than after death

The main benefit to gifting a living inheritance is that you are still around to see the difference your money makes. You might also find that your children receive the money when they need it most.

Inheriting on death, by which time your children might be in their 50s or 60s, might help during their retirement, but more important milestones – such as buying a first home or starting a family – occur much earlier in life.

Inheritance tax planning is a complicated space, and with any financial and tax planning around this area it is advisable to seek advice as to what step(s) is/are most appropriate for you and your family.

At Armstrong Watson, our quest is to help our clients achieve prosperity, a secure future and peace of mind. We provide bespoke tax planning, financial planning and wealth management all under one roof. Please note, advice on IHT related matters could be provided by a mixture of both our financial planning and tax specialists.

Paul Moody, of Armstrong Watson
  • For more information, email Paul at paul.moody@armstrongwatson.co.uk
No Result
View All Result
Cumberland and Westmorland Herald Logo

33 Middlegate
Penrith
Cumbria
CA11 7SY

Phone: 01768 862313
Email: news@cwherald.com

Registered in England as Barrnon Media Limited. No: 12475190
VAT registration number: 343486488

Explore

  • News
  • Sport
  • Farming
  • Property
  • Obituaries
  • Nostalgia
  • Your view

Useful links

  • Contact us
  • Photosales
  • Online archive
  • Buy your paper
  • Digital edition
  • North Lakes Living
  • Advertise
  • About us

Follow us on

© Barrnon Media Limited 2020

Terms & Conditions / Privacy Policy / Cookie Policy

This website and its associated newspaper are members of the Independent Press Standards Organisation
IPSO Logo
Review Your Cart
0
Discount
Add Coupon Code
Subtotal
Total Installment Payments
Bundle Discount
Checkout

 
0
No Result
View All Result
  • Home
  • News
  • Sport
  • Obituaries
  • Nostalgia
  • Online archive
  • more
    • North Lakes Living
    • Buy Photos
    • Buy your paper
    • About us
    • Contact us

© 2020 Cumberland & Westmorland Herald