The inheritance tax exemption for family maintenance

Where assets or cash are transferred to benefit a family member you may be able to argue that gift of assets did not represent a 'transfer of value' for inheritance tax purposes and as such the gift is not included in your estate if you died within seven years of the date of the transfer. This can apply in numerous cases and includes making reasonable provision for a dependent relative's care or maintenance. 'Care' includes the provision of services, whether privately or in an institution whilst maintenance' includes necessaries, such as food or clothing. Dependent relatives can be either a mother/father or any other relative. If the latter they would also need to be incapacitated and not able to look after themselves. A transfer of cash or other assets to a parent for living costs should therefore be exempt from IHT under this exemption.