Britons may be able to reduce their inheritance tax bill by giving gifts. However, there are certain rules which could mean gifts are still taxed.
The seven year rule
No inheritance tax is due on any gifts someone gives, as long as they live for seven years after giving the gifts.
The only exception to this is if the gift is part of a trust.
If the gift giver dies within seven years, there could be inheritance tax to pay.
For gifts given between four and five years before death, it is 24 percent.
The rate reduces again for gifts given five to six years before death, down to 16 percent.
Gifts given six to seven years before death will be taxed at eight percent.
And of course, for gifts given seven or more years before death, there is usually no tax to pay.