Field Notes · 2025-07-22
Gifts, the seven-year rule, and keeping records
Why timing and paperwork matter when reducing a potential inheritance tax bill through lifetime gifts.
Potentially exempt transfers can fall outside an estate if the donor survives seven years. Dying earlier may bring the gift back into the calculation on a tapered scale.
Annual exemptions and gifts from surplus income follow different rules. Mixing them without notes makes it hard for executors to evidence what was intended.
Keep a simple gift log: date, amount, recipient, and whether the gift used an exemption. Bank statements alone rarely tell the full story years later.
Large gifts of property or business interests need legal and tax advice beyond a financial planning conversation. We coordinate with your solicitor rather than replace that work.
Start earlier than you think you need to. Seven years is a long horizon, and rushed gifts near the end of life rarely achieve the calm outcome families hope for.