One of the biggest areas for saving tax by spending is through proper estate planning during your lifetime. Whether you are individual, the spouse of a marriage, a civil partner in a legally enforceable civil partnership or their survivor you have a number of potential options.

You can consider making large gifts of capital to your children, other relatives or close friends to utilise your available Inheritance Tax (IHT) exemptions and reliefs to the maximum. Caution should be exercised to ensure that you do not endanger your own quality of life by giving away more than you can comfortably afford!

You should also consider making gifts either to, or shared amongst, individual family or friends, or into protective family settlements. Gifts into family settlements (sometimes referred to as family trusts) might be recommended in preference to outright gifts to family members or friends for protective reasons.

Where you are the survivor of two spouses, or civil partners, you might find yourself under increasing personal pressure to consider gifting their house into a family settlement for the benefit of certain family members. Extreme caution should be exercised before estate planning of this nature is attempted.

Every year you can gift away assets or cash up to the value of your annual gift exemption allowance. Any unused portion from one year can be carried forward and cumulated with the following year only. The gifts making use of this allowance can be shared between more than one recipient if desired.

Each year you can make any number of "small gifts", each one not exceeding £250 in value, in any tax year. Gifts can be made of your income to any person and this will be exempt for IHT, providing strict qualifying criteria are met.

Gifts of cash to children, grandchildren, or other specified relatives getting married or entering into a civil partnership are exempt up to £5,000 and gifts of assets or cash to charities and political parties are fully exempt from IHT. Assets that will attract Business or Agricultural Property Relief can be gifted to family members without any tax consequence.

The key is to act now - but DIY is rarely anything but a dangerous option. Make sure you get proper advice first!

These notes are only intended as general non-exhaustive guidelines for those seeking information or help in respect of both lifetime and death estate planning. Specialised professional advice should be obtained after a full and proper review based on disclosure of all relevant financial and personal circumstances and specific needs.

To find out more, please contact Gareth Thompson - call 01562 66000 or email gbt@dwt.co.uk.