Inheritance tax taper relief
When taper relief applies and how it can reduce the tax that needs to be paid on lifetime gifts.
Gifting as part of normal expenditure out of income
Learn how normal expenditure out of income can be used in holistic planning for your clients.
Learn how gifting out of income works in the UK
Normal expenditure out of income is a valuable exemption which is often overlooked when undertaking tax planning. There is no seven year clock and it does not disturb any other exemptions, nor does it constitute a chargeable transfer. It can be used to prevent an inheritance tax (IHT) problem arising or getting worse.
The exemption for normal expenditure out of income is one of the most powerful, yet often underused, tools in inheritance tax planning.
This briefing note explains the conditions that must be met for gifts to qualify, how to establish a regular pattern of giving, and the importance of robust record‑keeping. It is designed to help you use surplus income to reduce a client’s taxable estate efficiently, without relying on survival periods or disturbing other exemptions.
Read more about how gifting out of income works.
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