The 7 year rule ONLY applies for estates over the thresholds of Inheritance Tax

 

Allowances for Gifting that don’t come into this:

 

The list below explains some of the key details for making tax-free gifts. 

£0 - The amount of tax due on gifts to your spouse or civil partner

• £3,000 - The total amount you can gift tax-free in a tax year (your 'annual exemption') - £6000 If first time

• £250 - Maximum amount you can gift tax-free to an individual that hasn't benefited from your annual exemption each year

• £0 - Amount of tax due on gifts given for maintenance of old or infirm relatives

• 18 - The age up to which you can gift your children with maintenance for their education or training tax-free

• £5,000 - The amount a parent can gift their child tax-free for their wedding

• £0 - Amount of tax due on gifts to charities or political parties.

• Excess regular income – you can gift this as long as you continue to live life to the same standard

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 Equity Release – take money out of your home and invest it or gift it to reduce capital – particularly good for large properties that form most of the estate. If you do this, you need to seek expert advice from a Specialist mortgage adviser who also knows a good financial adviser.

 

If you intend to give a gift but hold on to it so that you can still benefit from it, it will not qualify. Instead it will be seen as still remaining in your estate. For example, if you gift a gold watch and still wear it, it is still in your estate for tax purposes.