Farley And Partners

Use your exemptions

You should make the best use of IHT exemptions, including:

  • The annual exemption,
  • Normal expenditure gifts out of after-tax income,
  • Gifts in consideration of marriage/civil partnership (up to specified limits)
  • Exemption for gifts you make of up to a maximum limit
  • Exemption for gifts between spouses*, facilitating equalisation of estates

*Transfers on or within seven years of death to a spouse domiciled outside The Gambia are exempt only to an extent

If you die within seven years of making substantial lifetime gifts, they will be added back into your estate and may result in a substantial IHT liability for the recipients. You can take out a life assurance policy to cover this tax risk if you wish.

However you can make substantial gifts out of your taxable estate into trust now, and as a trustee retain control over the assets. However, the inheritance tax treatment of assets held in trust is extremely complex and undergoing a period of change, so you should discuss your thoughts with us in detail.

 

Estimate the inheritance tax on your estate   GMD
Value of: Your home (and contents)  
  Your business*  
  Bank/savings account(s)  
  Stocks and shares  
  Insurance policies  
  Car  
  Jewellery  
  Other assets  
Total assets    
Deduct:    
Mortgage    
Loans    
Other debts    
Total liabilities    
Net value of your assets    
Add: Gifts in last seven years**    
Deduct (assuming no unused spouse exemption)   – ?
Taxable estate   D
Tax at 40% is   D

 

** Chargeable and potentially exempt transfers.* If you are not sure what your business is worth, we can help you value it. Most business assets currently qualify for Inheritance Tax reliefs.

*** The rate reduces if gifts of 10% or more of the estate are made to charity.

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