It is better to spend or gift money NOW to reduce Inheritance Tax…

A leading North West-based independent financial adviser and accountant has spoken out about the importance of being aware of spending or gifting money now to reduce future inheritance tax (IHT).

Altrincham-based Junaid Afzal, commercial director at Haven Financial Planning who works across Cheshire, Lancashire, Manchester and Merseyside maintains that this is perhaps contrary to popular belief.

He said: “Let’s take the example of gifting. This reduces your estate size so anything you give away during your lifetime is no longer part of your estate after seven years. This reduces the taxable value of your estate too.

“You can actually give away up to £3,000 per tax year without it affecting IHT. Plus you can gift small amounts, up to £250 per person per year, and make regular gifts from surplus income.”

With regards spending on yourself, Junaid insists this also reduces your estate. “Using your wealth for holidays, home improvements, or other enjoyment reduces its value and your future IHT burden.”

Junaid adds that “There are some really important cautionary notes to all this and some key points on best practice here which I help people with in drafting a simple plan to reduce IHT.”

Junaid can be contacted in the first instance via [email protected] for a confidential conversation.