giftsChristmas is a time for giving and there are several ways to make over cash or assets to someone as efficiently as possible when it comes to inheritance tax (IHT).

IHT is only currently payable on any portion of your estate that is above a threshold of £325,000, and is charged at 40%, however this is reduced to 36% if you donate 10% or more of your estate to charity. If you are thinking of gifting assets or cash as presents this year, then read on to ensure that your gifts do not fall foul of IHT.

1. Small gifts
If you are in a position to do so, get Christmas covered by making use of the small gifts exemption. You can gift up to £250 each year to as many different people as you like in any one tax year (6 April to the following 5 April) without being liable for IHT.

2. Annual allowance
Over and above the small gifts exemption you can gift up to £3,000 in each tax year without paying IHT. You can carry forward all or any part of the £3,000 exemption you don’t use to the next year but no further. This means you could give away up to £6,000 in any one year if you haven’t used any of your exemption from the year before.

3. Gifts out of regular income
A less well known but very useful relief is the gifts out of income relief. Any gifts you make from surplus income as opposed to capital are free from IHT if they are part of your regular expenditure. There is no limit on the sums gifted provided the gifts do not impact on your normal living standards in that the funds used to make the gift are indeed surplus. This means that you could make regular monthly or annual gifts of the difference between your income for the year and your expenses for the year without them falling into your estate, but you do need to document the intention to provide HMRC after your death if your estate is liable for IHT. If for example, your income is £150,000 p.a but you only spend £100,000, then you could give away the remaining £50,000 without it counting as a gift for IHT purposes.

4. Gifts to exempt beneficiaries
(a) Spouses: If you are married or in a civil partnership, you can give anything you own to your spouse or civil partner if their permanent home is in the UK so your estate won’t have to pay IHT on what the gift is worth. Gifts to an unmarried partner, will not benefit from this exemption.

(b) Charities: A lot of us gift to charity at this time of year so remember any donations to charities based in the UK are exempt from IHT. If you use the gift aid scheme you can also save on income tax.

(c) National institutions, such as museums, universities and the National Trust as well as UK political parties are exempt.

5. Weddings
The festive season often means a family wedding and gifts in contemplation of marriage are exempt from Inheritance
Tax up to certain amounts:
• parents can each give £5,000
• grandparents and other relatives can each give £2,500
• anyone else can give £1,000

You have to make the gift on or shortly before the date of the wedding or civil partnership ceremony.

You can still make gifts that do not fall into any of the above groups. These gifts will be treated as potentially exempt transfers (PETS). On the basis you do not benefit from these gifts and provided you live for at least 7 years, such gifts should be free of IHT.

So with Christmas fast approaching, enjoy stress free gifting without worrying about IHT this festive season.
For more information please contact the Blackadders Executries team.

Tax and Private client teamLeading Scottish law firm Gillespie Macandrew has bolstered its Tax and Private Client team, with the recruitment of Tax Director Anne Marie Renz and Senior Tax Manager Alison Pryde.

Anne Marie is a Chartered Accountant with over 20 years’ experience advising on an extensive range of personal and business tax issues including business acquisitions and disposals, group reorganisations, business structuring and strategic capital gains tax and inheritance tax planning. She has particular expertise in property tax issues advising developers, investors and landowners on areas such as LBTT, VAT and capital allowances.

Alison has extensive experience of personal tax working within “The Big Four” accounting firms. She advises a variety of clients including individuals, trusts, partnerships and landed estates particularly in relation to Inheritance and Capital Gains Tax and the taxation of land. Alison will also be responsible for the management of Gillespie Macandrew’s tax returns team, ensuring the firm’s clients are compliant under the self-assessment regime.

Both are experienced Chartered Tax Advisors (CTAs) and join the Tax team at Gillespie Macandrew which already includes 2 CTAs and two members of the Association of Taxation Technicians in a Private Client Team where most are members of the Society of Estate Practitioners (STEP).

John McArthur, Head of Tax at Gillespie Macandrew said:
“Anne Marie’s and Alison’s appointments further develop our impressive tax capabilities, enhancing a team which already provides complex tax and legal advice to our clients and other professional advisers whether individuals, businesses, farmers or other land owners, particularly around inheritance tax. I look forward to working with them as we continue to build strength and depth in our private client and tax team.”

Fiona Morton, Chair of Gillespie Macandrew, said:
“Tax is a very important service at Gillespie Macandrew as it plays a key part in virtually all private client, commercial and property transactions. I am delighted to welcome Anne Marie and Alison to both the team and the firm. Their expertise will further strengthen this experienced team and help drive further expansion in one of our key growth areas.”

Photograph Caption: From left to right: Michelle McNeill (Associate), Anne Marie Renz (Tax Director), Alison Pryde (Senior Tax Manager), John McArthur (Head of Tax).

Arts & Business Scotland are delighted to confirm that bookings are open for our new business briefing Cyber Security: What You Need To Know, led by Accenture (Friday 21 July) and bookings are still open for A General Tax Guide for Arts and Heritage Organisations (Friday 23 July in Perth).

Cyber Security: What You Need To Know – Business Briefing
Friday 21 July 2017 | Arts & Business Scotland, Edinburgh
Registration: 8:30 | Event: 9:00-10:30

Speaker: Rick Hemsley (Managing Director, UKI Accenture Security Practice)
The scope of cyber security has never been so prevalent as almost every business is potentially at threat. This morning briefing will cover how to prepare a cyber resilience strategy, lessons learned from the recent ‘Wannacry’ virus, and preparing for GDPR.

For full details, address and booking click here.

A General Tax Guide for Arts and Heritage Organisations
Friday 23 July 2017 | Perth Concert Hall, Perth
Registration: 8.30am | Event: 9am-12.30pm followed by lunch and general discussion

Speakers: Kirsty Murray (Tax Director) and Scott Craig (VAT Partner), Scott Moncrieff
This half-day seminar is a must for all financial or budget holding staff and anyone who wants to know how tax affects (and can benefit) arts and heritage organisations and individuals. This session will highlight available tax savings and cover corporate tax, VAT, gift aid, basic rules, common issues and opportunities.

Full details, address and booking click here.

Please feel free to circulate this invitation to your networks and any colleagues who may be interested.

If you would like some more information on these events please do not hesitate to get in touch with Adam Castle (Event Coordinator at Arts & Business Scotland) at events@aandbscotland.org.uk.