Nearly half (47 per cent) of parents and grandparents do not understand the tax rules around gifting, with almost three quarters (73 per cent) admitting they find the rules ‘very complicated’.
The survey, which focuses on the gifting behaviour and plans to gift from the ‘Bank of Mum and Dad’, has found that found 38 per cent are unaware their estate might be liable for inheritance tax (IHT) on gifts to family members. Yet 58 per cent would like to be able to help children and grandchildren on to the property ladder and 37 per cent would gift a ‘living inheritance’ if tax breaks to boost intergenerational wealth transfers were provided by Government.
A spokesperson says: “At a time when the financial squeeze on younger generations is getting worse it makes sense that grandparents and parents want to help their family now rather than waiting till their death.
“But there is real nervousness and confusion when it comes to the awareness around the rules of financial gifting.
“We would support tax breaks on gifts and early inheritance in those instances where the incentives can be used for major intergenerational gifts, which have a greater perceived societal benefit. From rising student loans to property prices younger generations need a helping hand more than ever. Early inheritance can have life changing consequences for some families and our study shows that equity release could be a major source for these gifts.”
Our experts at Beavis Morgan can advise on all aspects of inheritance tax planning. We regularly work with law firms to ensure that your estate is distributed in accordance with your wishes and, at the same time, is protected and only incurs the minimum of inheritance tax.
If you would like to know more, please contact Alan Ford or your usual Beavis Morgan partner.