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ARTICLE · 20 NOVEMBER 2013

Tax Planning For Christmas?

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Besides the feel-good factor that it provides, end of year gifting is also advantageous from an estate planning perspective since it can move assets out of one estate into one taxed at lower rates and/or channel assets to the next generation.

United KingdomTax
Maya Ladno
Maya Ladno
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Besides the feel-good factor that it provides, end of year gifting is also advantageous from an estate planning perspective since it can move assets out of one estate into one taxed at lower rates and/or channel assets to the next generation.

In 2012, due to uncertainty over the federal, estate, gift and generation skipping transfer tax credit shelter amounts and applicable taxing rates, many individuals made significant contributions out of their taxable estate to take advantage of the $5,120,000 federal exemption amount before a possible decrease to $1,000,000.

In January of this year, however, Congress authorised a 'permanent' exemption amount (less any previous taxable gifts made). In 2013, that amount as indexed is $5.25m. In 2014, the amount is scheduled to be $5.34m. Married couples may currently pass $10.5m if both spouses are US citizens or domiciled in the US. Additionally, the annual exclusion for gifts increased to $14,000 in 2013 (and will remain at

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