Would this logic place such items as home extensions, replacement windows/doors/shutters and replacement central heating systems etc as reasonable capital spend, the value remaining in the estate, or as maintenance in the same group as decorating required to maintain one's standard of living?.
Harvey Dorset, of This is Money, replies: The exemption you are looking to use, officially known as 'normal expenditure out of income', is a useful way of passing on wealth to your children without incurring inheritance tax on the money you give to them.
For example, it is understandable that IT purchases would be considered a 'living expense' as they quickly become redundant, while purchases of expensive jewellery remain in the estate and can thus be regarded as capital expenditure.
Once one is dead there is little that can be done to correct mistakes... To this end is there a definitive list of what HMRC consider as genuinely capital spend as opposed to living expenses.
I'm planning to use gifting out of surplus income to mitigate inheritance tax, but I have some concerns.
