Essentially, if you live for more than seven years after giving this gift, your children or relatives will not have to pay Inheritance Tax on your gift when you pass away.
Initially, when the gift is given, it's called a Potentially Exempt Transfer because, assuming you survive for another seven years, there will not be any Inheritance Tax due on it.
But if you do not live for more than seven years after giving the gift, they may have to pay Inheritance Tax.
Brits who have gifted money to family members in the past seven years have been warned that they could be liable for inheritance tax.
"That said you can only base your decisions on the facts as they are now and seemingly there are still ways available to reduce the inheritance tax paid by your estate, although many of them do require time and more risk.".
