{"id":120298,"date":"2026-05-10T09:15:31","date_gmt":"2026-05-10T08:15:31","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=120298"},"modified":"2026-05-10T09:08:56","modified_gmt":"2026-05-10T08:08:56","slug":"the-gift-trick-thousands-are-using-hmrc","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/the-gift-trick-thousands-are-using-hmrc\/","title":{"rendered":"The ‘Gift’ Trick Thousands Are Using to Legally Slash Their HMRC Bill"},"content":{"rendered":"\n

A growing number of wealthy savers are taking active measures to reduce their Inheritance Tax (IHT) liability, with cash gifting proving the most favoured approach, according to new research from Paragon Bank<\/strong>. The findings, drawn from a survey of more than 2,000 active savers holding balances above \u00a350,000<\/strong>, suggest that financial planning around inheritance has become an increasingly mainstream concern rather than a niche preoccupation.<\/p>\n\n\n\n

The data found that 28% of respondents had taken deliberate action to lower their IHT exposure. Of those, 68% had chosen to give cash, making it the single most common method by some distance.<\/p>\n\n\n\n

Gifting Strategies and the Seven-Year Rule<\/h2>\n\n\n\n

Beyond cash gifts, savers <\/strong>are deploying a range of other approaches. Boosting lifestyle spending was cited by 37% of those who had acted, while 27% had created a trust or alternative legal arrangement. Charitable donations from the estate were arranged by 23%, and 16% had transferred an asset such as property or land.<\/p>\n\n\n\n

Among those making cash gifts, a third donated up to \u00a33,000 per tax year (the annual gifting threshold under current HMRC rules) allowing them to transfer wealth free from IHT risk. A quarter, however, had made individual cash gifts exceeding that amount. Of those giving beyond the threshold<\/strong>, 27% had donated between \u00a33,000 and \u00a310,000, while 19% had transferred a lump sum of between \u00a310,000 and \u00a325,000. Larger transfers were also common: 30% had given between \u00a325,001 and \u00a3100,000, and 14% had gifted more than \u00a3100,000.<\/p>\n\n\n\n

The seven-year rule<\/strong> (which determines whether a gift remains subject to IHT should the donor die within seven years of making it) was a source of some anxiety. According to Paragon’s findings, 38% of those giving beyond the annual threshold said they were concerned about this rule, whilst 3% admitted they were entirely unaware of it. As for where the money <\/a>goes, nearly half of cash gifters said they had given to their children, a quarter to grandchildren, 19% to other family members, and 15% to charitable causes.<\/p>\n\n\n\n

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Why Inheriting a House Can Be Tax-Free \u2014 But Receiving It as a Gift Isn't#inheritance<\/a> legal issue #Step<\/a>-up tax base #tax<\/a> carryover base #tax<\/a> save legal #inheritance<\/a> tax issue pic.twitter.com\/XBRjwzYFgm<\/a><\/p>— Pisgah Law (@PisgahLawjing) May 10, 2026<\/a><\/blockquote>