There are exemptions from inheritance tax, on top of the £3,000 annual allowance, for regular gifts you give from income rather than from savings and investments. But these gifts only qualify if you have enough income left after making them, to maintain your normal lifestyle. You should also make a written declaration that the gifts you’re making are expenditure out of income, not from savings or investments. Another option is to make one-off larger gifts to reduce the size of your estate. However, do bear in mind that if you die within seven years of making the gift, your heirs may still need to pay tax on them.
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