"Assets can also be transferred between spouses free of tax, which can help to use up both spouses’ annual exemptions and any capital losses."
The capital gains tax annual exempt amount will more than halve to £6,000 from April 2023 and will then halve again to £3,000 from April 2024, making planning around this more difficult in future.
7. Inheritance tax – making use of reliefs
Gifts people make to other individuals are generally not subject to IHT unless the donor dies within seven years.
There is also an annual gift allowance of up to £3,000 per tax year, and this will not be subject to IHT even if the person dies within seven years.
Whatling says: "This £3,000 annual allowance can only be brought forward for one tax year, so if you have assets to spare you may want to consider using up this and last year’s allowance before 5 April."
The current year’s allowance is automatically used first. It is per donor, not per recipient, so a married couple can make gifts independently, he adds.
Rate bands and allowances for IHT are currently frozen. "There is a risk that the Spring Budget on 15 March 2023 will bring further changes to IHT, so you may wish to consider making good use of the current allowances where possible," says Whatling.
carmen.reichman@ft.com
