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Lifetime Giving

At Blackstone Solicitors, we understand that planning for the future involves more than just preparing for what happens after you’re gone. Lifetime giving—gifting assets to family, friends, or charities during your lifetime—can be an integral part of a comprehensive wealth management strategy. This approach not only allows you to witness the benefits of your generosity but can also play a crucial role in managing inheritance tax (IHT) liabilities and ensuring your estate is distributed according to your wishes.

Contact us today and we can talk you through our services and how we can help you and your family. Simply call us on 0345 901 0445 or complete our online enquiry form and a member of the team will give you a call back as soon as possible.

At Blackstone, we always aim to provide the best service possible. Meticulous in our approach, we will make sure everything is dealt with as you wish and will keep you updated throughout the legal process, ensuring that you always know of any developments.

Our Services

We can provide help with a wide range of matters relating to Succession Planning, including:

• Director Lasting Power Of Attorney
• Partnership agreements
• Shareholder Agreements
• Amends To Articles Of Association
• Making a Will
• Setting up Trusts
• Lifetime Giving
• Charitable gifts and trusts
• Protection from care home fees
• Setting up a Lasting Power of Attorney
• Setting up a Health and Welfare Lasting Power of Attorney
• Setting up a Property and Financial Lasting Power of Attorney

We have partners we work closely with that can advise upon:

• Tax Planning including advising on capital gains tax and income tax for individuals, businesses, landed estates, professionals, entrepreneurs and advice on matters including business relief, exemptions and retirement planning.

The Benefits of Lifetime Giving

Lifetime giving offers numerous benefits, both emotional and financial. It allows you to see the positive impact of your gifts on the recipients, whether it’s supporting a loved one’s education, helping them buy a home, or contributing to a charitable cause you’re passionate about. Beyond the personal satisfaction, there are significant financial advantages, particularly in the context of inheritance tax planning.

In England and Wales, IHT is charged at 40% on estates above the tax-free threshold of £325,000 (known as the nil-rate band). By making gifts during your lifetime, you can reduce the value of your estate and potentially lower the IHT payable upon your death. Strategic lifetime giving can help ensure more of your wealth is passed on to your chosen beneficiaries rather than being lost to taxation.

Exemptions and Reliefs Available for Lifetime Giving

When considering lifetime giving, it’s important to understand the various exemptions and reliefs available. These can help you make tax-efficient gifts without triggering an immediate IHT liability.

1. Annual Exemption

Each individual can give away up to £3,000 per tax year without incurring IHT. This is known as the annual exemption. If you didn’t use your full exemption in the previous tax year, you can carry it forward, allowing you to gift up to £6,000 in the current year.

2.  Small Gifts Exemption

You can make small gifts of up to £250 to as many individuals as you like each tax year, and these gifts are exempt from IHT. However, this exemption cannot be combined with the annual exemption for the same recipient.

3. Gifts on Marriage or Civil Partnership

Gifts made to a couple getting married or entering into a civil partnership are exempt from IHT, up to certain limits. Parents can each give £5,000, grandparents can give £2,500, and anyone else can give up to £1,000. This exemption applies to each person, so a married couple could potentially receive significant gifts from multiple sources.

4. Normal Expenditure Out of Income

If you make regular gifts from your surplus income, these can be exempt from IHT under the ‘normal expenditure out of income’ rule. To qualify, the gifts must be part of your regular spending, made from your income (not capital), and must not reduce your standard of living. This exemption can be particularly useful for those with significant disposable income who wish to support family members or charities on an ongoing basis.

5. Potentially Exempt Transfers (PETs)

Gifts that exceed the annual exemption or fall outside other specific exemptions are known as Potentially Exempt Transfers (PETs). If you survive for seven years after making a PET, it becomes fully exempt from IHT. However, if you die within seven years, the gift may be subject to IHT on a sliding scale known as ‘taper relief’. The longer you survive after making the gift, the less tax will be due.

Lifetime Giving Strategies

There are several strategies you can use to make the most of lifetime giving, depending on your personal circumstances and financial goals.

1. Regular Gifting

Making regular gifts using the normal expenditure out of income exemption can be an effective way to reduce the size of your estate without impacting your lifestyle. This strategy is ideal for those with high incomes who wish to support their children, grandchildren, or favourite charities over time.

2. Trusts

Establishing a trust can be a powerful way to make lifetime gifts while retaining some control over how the assets are used. Trusts can be particularly useful if you wish to provide for young or vulnerable beneficiaries who may not be ready to manage large sums of money. At Blackstone Solicitors, we can advise on the different types of trusts available and help you set up a structure that meets your needs.

3. Gifting Assets

Instead of cash, you may choose to gift assets such as property, shares, or valuable possessions. These gifts can also qualify as PETs, with the same seven-year rule applying. However, it’s important to consider the potential capital gains tax (CGT) implications of gifting assets that have appreciated in value. Our team can help you navigate these complexities to ensure your gifts are tax-efficient.

4. Charitable Donations

Making gifts to registered charities during your lifetime can provide immediate tax relief while supporting causes you care about. Charitable donations are exempt from IHT, and if you leave at least 10% of your estate to charity, the IHT rate on the remainder of your estate can be reduced from 40% to 36%.

Our Approach

We are 100% committed to ensuring each and every one of our clients receives the highest quality service and we will go the extra mile to ensure that you are happy with the results gained. We understand it can be particularly difficult to deal with matters relating to death and inheritance, and this is why our friendly and approachable team always take a sympathetic and understanding approach, ensuring that you receive the support you need.

We believe communication is of the utmost importance. We will therefore keep you updated as things develop and our solicitors will provide practical, straightforward legal advice so that you can be confident everything is progressing as you would like.

Get in Touch

Contact us today to discuss any matter relating to Succession Planning. We can talk about your situation in depth and get to the bottom of what you need and how we can help. We are here to answer any questions which you have, and we aim to make everything as simple for you as possible.

Our team is approachable, professional and vastly experienced. We will do everything in our power to help you get the outcome you need. Call us on 0345 901 0445 or, if you would prefer us to contact you, leave your details via our online enquiry form.

We offer our services to clients in Manchester, Chester, Cheshire and throughout the rest of the UK. We also have an office in London.