There is, currently, a £312,000 IHT threshold in place. This means that, on death, the first £312,000 of our estate will not be subject to IHT. Any amounts gifted above this amout will be subject to the Seven Year Rule, so we need to make sure that the receipients can afford to pay the bill.
There are other ways of making IHT exempt gifts. For example, you can give away an annual, tax free, allowance of up to £3,000 to family or friends. If this is not used in the first year, it can be carried forward to the next year only. So, if you've not done this before, you can gift up to £6,000 (bringing forward last year's allowance) in the first year. This means that a couple can gift £12,000 in the first year, and £6,000 per year thereafter.
Putting this money in trust for your children or grandchildren could give them a head start on the property ladder or pay for their education.
Elderly parents should review their estate as soon as possible, making sure they have an up to date will, and that loved ones know where it is.
Whether you provide care for them or not, they could look to make regular gifts from income to you (provided that, in doing so, they are not reducing the quality of their lifestyle).
These gifts (which can be for any amount) can fall outside their estate for IHT purposes. If they move into your home and contribute to running costs and bills, make sure a record is kept of all expenses, so you don't incur an unwelcome income tax or IHT bill.
As with all legislation, IHT law is subject to change, so always check out the current position when looking to make a gift of this nature.