The Individual Inheritance Tax Allowance for tax year 2010/2011 is £325,000

Certain lifetime gifts can be made without giving rise to an inheritance tax charge. For 2010/2011 the annual gift exemption is £3,000 and it is worth considering making a gift of this amount if you are in a position to do so.

In addition, if you did not make use of any part of the £3,000 annual gift exemption to which you were entitled for 2009/2010, then this can be utilised before 5th April 2011. Please note that any unused allowance for the earlier tax year must be used before the current year’s allowance. It can only be carried forward for one year and then, if unused, it is lost.

Unlimited gifts can also be made in the form of Potentially Exempt Transfers (PETs). Provided you live for 7 years after making the gift, it will be free of inheritance tax.

Please ensure that, should a gift be made by cheque, sufficient time is given for the cheque to clear before 5th April; otherwise it will not be included in the current year’s total.

Gifts of £250 can be made to any number of separate individuals without giving rise to an inheritance tax charge. Gifts of varying amounts can also be made between family members on the occasion of a wedding/civil partnership ceremony, without any inheritance tax liability.