Inheritance Tax: The Magic Number Revealed
When it comes to inheritance tax, the magic number is seven. This is the length of time for any gifts to be officially counted as outside of your estate, thus avoiding inheritance tax. Families are increasingly utilizing the power of the seven-year rule to gift wealth to their children and grandchildren earlier in life.
There are various strategies to avoid the seven-year trap, such as setting up trusts, putting life insurance into trust, or using pension savings. Equity release, transferring for children’s education, and investing in shares listed on the Aim market for business relief are other options to explore.
However, navigating inheritance tax can be complex due to the numerous carve-outs and reliefs available. It’s essential to understand the rules and seek professional advice to mitigate tax liabilities. With proper planning and knowledge, you can safeguard your wealth and ensure a smooth transfer to your beneficiaries while minimizing your tax burden.
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