UK royal wedding set to boost IHT: 7IM
UK inheritance tax planning is set to receive an unlikely boost from the forthcoming royal wedding, according to investment specialists Seven Investment Management (7IM).
The year after William and Kate’s marriage in 2011, there was a surge in weddings in Britain, according to research by 7IM.
And as Meghan and Harry prepare to meet at the altar, the UK investment company has pulled together some thoughts for those tempted to follow their lead.
It may not sound very romantic, 7IM said, but a wedding or civil partnership can be “a great opportunity” for parents and grandparents to do some smart inheritance tax planning.
As a wedding gift, parents can each give £5,000 (so £10,000 in total) and grandparents £2,500 each without inheritance tax implications. Other individuals can give away up to £1,000.
Individuals can make up to £3,000 in gifts in a year without inheritance tax constraints. For couples that means £6,000. Unused allowance from the previous year can also be given, which might take a gift from a couple to £12,000.
So taking this into account, alongside the £10,000 that two parents could collectively give for a wedding, could mean up to £22,000 free of inheritance tax (IHT) implications.
Sophie Kilvert, relationship manager, 7IM, said: “For a couple who have not made any substantial gifts in the past couple of years and are in the fortunate position to be able and willing to – which means gifts that come out of savings, rather than normal expenditure – a wedding or civil partnership is the chance to give away up to £22,000 in cash presents to your child.
“Anything more than that and you have to live another seven years for the value of the gift to fall completely outside of your estate for IHT purposes.
“You can make gifts out of normal expenditure too, so if a child or grandchild has a long engagement and you want to help pay for the wedding and still make a large cash gift on the day, you might consider setting up a direct debit and making monthly contributions for a while – this can be a big help paying towards costs,” she added.