On the back of the Panama papers came the rather unexciting news that the Prime Minister had received a gift from his mother that could `potentially avoid inheritance tax’. However, there is nothing untoward about this. The ability to make a gift potentially free of inheritance tax is enshrined in the legislation and is available to everyone. The trick is for the donor to survive seven years after making the gift.
It is possible to escape inheritance tax on gifts by surviving for seven years after the date of the gift. However, the benefit of making lifetime gifts may be lost if the gift comes with strings attached.