By using all of the annual gifting allowances, families can reduce their eventual inheritance tax bill.
Each person can give £3,000 a year plus an unlimited number of gifts to individuals up to £250 for each person.
The money given is then not counted in the estate.
So a couple with two children and four grandchildren could give away a total of £8,000 each year.
In addition, there are further allowances for wedding gifts. Parents can give a £5,000 wedding gift, grandparents £2,500 and other relatives and friends can give £1,000.
Regular gifting can also be made free of IHT. Regular payments can be any amount, but must be made on a regular basis and come from income with the proviso that it does not reduce the standard of living of the giver.
