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For many years now, it has been tradition to leave your life possessions and wealth to your children when you die. Lately there seems to be an increase of people that want to live life to the full and spend their children’s inheritance. This made us think, why can’t you do both – live life to the fullest and leave an inheritance. 

Some couples don’t want their wealth to stop their children from working hard or saving money to buy a house or putting money away for their retirement. They don’t want their fortune to encourage their children to think they are entitled. Some couples also believe that they have the right to enjoy the fruits of their labour and enjoy their wealth and embrace life. 

The Baby Boomer generation have been able to benefit from good salaries, free education, rising property values and final salary pensions. However, their children have been hit be university fees, lower rates, expensive property prices and a competitive job market. The children of the Baby Boomer generation are the ones that hope for inheritance so that they can be financially secure in retirement. 

So how can you do both? 

Speaking with us so that we can help you financially plan for the future will help. It is all about balance. Parents can fill their retirement dreams or travel but they should do this modestly.

Some of our clients are looking into the option of gifting their children some of their inheritance early to either help get on the property ladder or to start their own family. It is times like these that a financial gift can really make a difference in their children’s lives. It will provide them with a head start and can help them focus on building up their own savings. 

How much is the annual ‘gift allowance’?

While you’re alive, you have a £3,000 ‘gift allowance’ a year. This is known as your annual exemption. This means you can give away assets or cash up to a total of £3,000 in a tax year without it being added to the value of your estate for Inheritance Tax (IHT) purposes. Gifts that are worth more than the £3,000 allowance in any tax year might be subject to Inheritance Tax. Anything above this has the potential to be caught under IHT rules before 7 years.

Whether you decide to spend your savings now or to leave an inheritance to your children, we can help you plan. We will meet with you to create your own personal financial plan to achieve the life goals you want. 

If you would like to speak to one of the Resolve Financial Solutions team, please get in touch

*Please note: The Financial Conduct Authority does not regulate Inheritance Tax Planning.

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