Inheritance tax: How you can pass on wealth whilst still alive

A large majority of Britons hope that they will be able to leave behind something, such as money or property, to help their loved ones when they die. However, according to new research from Killik & Co, the cost of living crisis has caused millions of people in the UK to change their inheritance plans. The findings by the financial services company revealed that more than seven in ten people in this group have already given or are planning to pass on money to their children early.This is due to the possibility of changing tax laws and the uncertainty the future has for their savings pot.A quarter of people said they are now expecting to leave their family ‘nothing at all’.As households continue to face huge inflationary pressures, a third of respondents to the Killik & Co survey say they’re worried about the ability of their children or grandchildren to cope after they die.Only a fifth are confident they can deal with the impact on their own finances, while a tenth are now receiving financial support to help with higher living costs.READ MORE: 70 health conditions qualify for extra £156 a week in PIP from DWP The cost of living crisis is causing people to leave less for their loves ones when they die (Image: GETTY)William Stevens, head of financial planning at Killik & Co, said: ‘Living costs are rising at a pace that we haven’t seen for decades, so it’s not surprising that people are having to make some difficult financial decisions.’We know that parents want to make a positive contribution when they pass on wealth, and this is no different during a time of economic uncertainty.’Our research shows that many are bringing forward inheritance plans to help their children and some are having to rethink their plans because of the rising cost of living. Parents naturally want to put their children first, but it’s vital that they consider their own needs.’We strongly recommend that anyone considering making changes to legacy plans should speak to a financial planning expert who can provide clarity and tailored advice on the long-term implications, as well as how to make decisions that make the most financial sense for all.”DON’T MISSState pension sum may be less if you were ‘contracted out’ – check now [WARNING]What the falling pound will mean for YOUR finances [ALERT]Single mum on Universal Credit shares her top tips for saving money [INSIGHT]450,000 people may be placed on energy prepayment meters [ALERT] There are rules with Gifting that Britons will need to be aware of (Image: GETTY)Birthday and Christmas gifts which are given from a person’s regular income are exempt from inheritance tax.People are also entitled to give larger financial gifts for weddings without having to pay inheritance tax on it.Parents can give their children £5,000 if they are getting married and can give £2,500 to a grandchild or great-grandchild.They can also give a gift of up to £1,000 to another relative or friend.People can also make regular payments to help with another person’s living costs, known as “normal expenditure out of income”.According to HM Revenue and Customs rules, gifts under this cannot affect a person’s own standard of living and for the exemption to apply, the person must demonstrate a ‘regular pattern of giving over a reasonable period of time’.