The greatest gift? Peace of mind this Christmas

The spirit of gifting

Gifting during your lifetime can be a wonderful way to support family and friends, reduce the value of your estate for inheritance tax (IHT) purposes, and share your wealth while you’re alive to see loved ones enjoy it. But it’s important to understand the rules before you decide what you will be gifting this year:

• Annual Exemption: You can gift up to £3,000 each tax year without it being added to your estate on your passing for IHT purposes.
• Small Gifts Exemption: Gifts of up to £250 per person per year are exempt, provided the recipient hasn’t received part of your Annual Exemption.
• Potentially Exempt Transfers (PETs): Larger gifts that exceed your Annual Allowance may be exempt from IHT if you survive for seven years after making them.

If you’re considering substantial gifts or want to explore more structured options, professional advice is essential to avoid unintended tax consequences.

New year, new Will

The start of a new year is the perfect time to take control of your future planning. If you’ve been meaning to draw up a Will, or even update an existing one, now is the time.

A Will give you power to decide:

• Executors: who will be responsible for administering your estate
• Guardians: who will look after your minor children
• Beneficiaries: who will inherit your assets, from property and savings to personal belongings.

More time spent with family at Christmas may provide opportunities to have conversations about your wishes. This can give you – and your loved ones – comfort that your instructions are understood and that they will be correctly carried out when the time comes.

Lasting Powers of Attorney (LPAs)

More time with family and friends can provide the chance to engage in discussions around making LPAs. LPAs allow you to appoint someone you trust to make decisions on your behalf if you lose mental capacity. There are two types of LPA:

• Property & Financial Affairs: Covers decisions about money, property, and bills.
• Health & Welfare: Covers decisions about medical treatment and care.

Putting LPAs in place before any concerns about mental capacity arise ensures your affairs can be properly managed in accordance with your instructions and wishes. In some circumstances it can also mean that your spirit of Christmas gifting can continue, by allowing your attorneys to make reasonable gifts at Christmas time to your loved ones, should you lack capacity to do so yourself.

A thoughtful season

Whether you’re wrapping gifts or planning for the year ahead, taking time to consider your estate planning is one of the most thoughtful things you can do for your family. At Thackray Williams, we’re here to help you navigate every step—from gifting strategies to drafting Wills and LPAs tailored to your specific needs. If you would like to start the New Year by taking control of your affairs, please contact an expert in our Private Client team on 020 8290 0440.