In the last year just 430 families took advantage, but the combined saving was £67m.Īnyone with sufficient “surplus income” can use the tax break, meaning thousands more families may have neglected to claim, missing out on a huge IHT saving. In total, they passed on £304m free from IHT. Over the past five years, just 2,490 taxpayers cut their IHT bills after claiming for the exemption, according to figures obtained by Telegraph Money in a Freedom of Information request. But new figures from HM Revenue & Customs show that this potentially lucrative tax break is underused. The “normal expenditure” rule allows families to gift far larger sums.

Each individual can give away up to this amount every year IHT-free. One of the best known is the £3,000 annual exemption. There are strict rules on how much can be gifted before IHT is due.

It was recently revealed that the number of estates faced with an IHT charge hit a 20-year high of 41,000 in 2022, up from 33,000 the year before. Many people choose to give away wealth during their lifetime in order to sidestep the divisive 40pc levy, which is ensnaring more and more families as property prices rise while tax thresholds are frozen. Last year 430 families guarded £67m from death duties by using the “normal expenditure out of income exemption”, which allows individuals to make unlimited gifts completely free of IHT. Forster (Futrovsky, Forster & Scherr, Chartered), who represented the estate.Families are shielding tens of millions of pounds from inheritance tax by using a little-known loophole. Abraham Ahmad, who tried to challenge it on various grounds, partly on the theory that 'under Iranian laws, he inherited an indefeasible fixed portion of Mehdi's estate that automatically vested at his birth and applies to all assets that can be traced to assets that Mehdi owned when Abraham was born in Iran.' No, said the court, for various reasons, including this:įinally, we note that, even if the doctrine of comity Ĭongratulations to Todd P. Mehdi's will disinherited Mehdi's eldest son, M. In 1996, Mehdi became a naturalized citizen of the United States. Shortly thereafter, Mehdi immigrated to the United States and settled in Maryland…. In 1982, after being summoned to appear before the Islamic Revolutionary Court, Mehdi left Iran and traveled to Turkey. The decedent, Mehdi Ahmad, was born in Iran in 1923…. 23 by the Maryland intermediate appellate court, in an opinion by Judge Dan Friedman, joined by Justices Douglas Nazarian and Terrence Zic:

The inheritance games about