Licence to gift! Daniel Craig will not be gifting his estate

Daniel Craig has recently made the news, as he has commented again that his children will not inherit his £117 million estate when he passes away. His philosophy is “get rid of it, or give it away before you go”.

Daniel, along with many other parents feel that their children are not entitled to an inheritance and that they should learn the value of working hard for their money and not be given assets for nothing.   

Whilst many of us would find it hard dissipating £117 million, Daniel is certainly giving it a go to reduce the value of his estate, by spending it on lavish holidays and alike.  He is not wrong in his thinking, as any assets he has over the value of his Tax-free allowances, will be subject to Inheritance Tax at 40%, so the more he can reduce his estate down in his lifetime, the less will go to HMRC in Taxes.

There are various ways in which a person can try to reduce their Inheritance Tax bill and this must follow the current tax guidelines.  One option, which Daniel is clearly trying to take advantage of, is gifting away his assets during his lifetime, to reduce the value of his state.

Daniel could be doing this by gifting away property, money, personal goods, or a loss of something being transferred to another individual.  There are stipulations when making gifts though, that the person making the gift must survive seven years from the date of making the gift, otherwise the gift could be taken into account when determining the size of his Estate when he passes away.  These types of gifts are known as potentially exempt transfers.

Another option would be for Daniel to gift away his assets to charities either in his lifetime, or via his will when he passes away. Any gifts to a charity in his lifetime are Tax-exempt and if he left 10% of his estate to charity under his will then the standard 40% Tax amount would be reduced to 36%. 

If you would like to make a will or seek advice on the Inheritance Tax implications of gifting away your assets in your lifetime, then please contact one of our specialists on 01206 217609 or leah.woodnot@birkettlong.co.uk.