Readers’ forum: Use of the IHT relief for gifts out of income

The recent publicity about inheritance tax seems to have energised some of my clients. I was talking to one recently about the various reliefs that were available to reduce the potential future liability of himself and his wife. As he has a high level of income from his business and property portfolio he was very interested in gifts out of income. I stressed that to benefit from this relief such transfers to his children should be made on a regular basis but I do not have practical experience in claiming this relief – which I understand is probably underused.

Can Taxation readers provide some information on the regularity of such gifts – should these be made monthly or is an annual transfer sufficient? Also how should such gifts be evidenced? Should he send the recipient a covering letter and keep a copy for himself and what records should be...