We often advise our clients who are carrying out any Estate Planning exercise to keep good records of any gifts that they make during their lifetime.
This includes any payments that they make known as expenditure out of income.
But how should you record any such gifts?
It seems to me that a simple thing to do would be to use the very HMRC form that your executors would be expected to complete in the event of your death:
Schedule IHT 403 – Gifts and other transfers of value
It is usually only used after the event so to speak and you will note that the very first entry box is ‘Name of the Deceased’ but there is no reason why it cannot be used as a practical aid during your lifetime.
The schedules include;
* Gifts made within the seven years before death (no one knows when that is going to be of course);
* Gifts with reservation of benefit (not good for IHT purposes but sometimes done for other reasons);
* Pre-owned assets;
* Earlier transfers; and most importantly
* Gifts made as part of normal expenditure out of income.
Keeping the right records will ensure that you get the most efficient use out of any estate planning that you do.
