Tax, investments and pension rules can change over time so the information below may not be current. This article was correct at the time of publishing.

How to use gifting as part of your Inheritance Tax Planning in the UK

If you are concerned about the impact that Inheritance Tax (IHT) will have on the amount of money you will be able to pass onto your loved ones, there are several steps you can take to reduce your liability.

Gifting is a tax-efficient way of reducing the value of your estate over time.

At Four Wealth Management, one solution is to invest in a Gift Plan through St. James’s Place. This combines an investment bond with either an absolute or discretionary trust which you retain control of and can choose who benefits from it.

You can make further investments into the Gift Plan at any time. You are automatically the trustee and can manage the trust accordingly, you can also appoint additional trustees to manage the trust alongside you. Payments can be made to your chosen beneficiaries at any time.

You can book a no-obligation initial meeting with a financial adviser to find out more about a Gift Plan by calling us on 0117 973 0500 or leave us a message.

Find out more about Inheritance Tax Planning

What can a Gift Plan be used for?

As already mentioned, a Gift Plan can be used to maximise the use of Inheritance Tax exemptions and reliefs.

A Gift Plan is flexible and will help you to make sure that your wealth is passed on how you choose and when. Assets in a discretionary trust do not form part of your beneficiary’s estate.

Research has shown the average cost of paying for private school is £17,232 per year or £275,000 per child from Year 1 to Year 13*. Many people choose to use assets in a Gift Plan to contribute to school or university fees for their children or grandchildren.

Annual exemption

The first £3,000 (or £6,000 for joint investors) usually qualifies as an exempt transfer and is immediately outside of your estate for Inheritance Tax purposes. If you have not used this exemption in the previous tax year, you can carry it forward which could be £12,000 per couple.

The seven-year rule

All investments in the Gift Plan (unless otherwise exempt) are outside of your estate if you survive for seven years after making the gift. Therefore, it is important to start planning for Inheritance Tax early in order to take advantage of this.

Book a no-obligation meeting to discuss Inheritance Tax planning

Investment growth

Any growth on your investments in the Gift Plan are immediately outside of your estate for Inheritance Tax purposes. There will also not be any personal liability to Income Tax on fund growth.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and can fall as well as rise. You may get back less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are dependent on the individual circumstances.

Subject to eligibility and HMRC ratification.
Trusts are not regulated by the Financial Conduct Authority

Start planning today

To leave more to your family and less to the tax man, start Inheritance Tax planning early. Book a no-obligation meeting to discuss your circumstances with a financial adviser on 0117 973 0500.


*This is money, ‘Cost of sending a child through private school hits £275,000’, 2018





Enquire Now

If you have any queries or would like to arrange a face to face meeting with an adviser for a no obligation review of your personal finances, simply book a call back using the form below. Alternatively, you can call us on 0117 973 0500.

The Partner together with St. James's Place Wealth Management plc are the data controllers of any personal data you provide to us. For further information on our uses of your personal data, please see the Partner's Privacy Policy or the St. James's Place Privacy Policy.

Share this article

Share on google
Share on linkedin
Share on print
Share on email