More than half of people making large gifts of money or assets are unsure or unaware of Inheritance Tax (IHT) rules that might apply.

Research on behalf of HMRC found that, of 2,090 people surveyed, only 45% who had recently made a gift knew about the relevant rules when making the gift.

And, among those who were aware of the rules, it was not found to be a major influence when gifting, with only 18% of those with knowledge of IHT rules citing them as a factor in their decision to make a gift.

Around 13% of people surveyed were identified as ‘gifters', having given a single gift of £1,000 or more, or multiple gifts of £250 or more that totalled at least £3,000, in the two years.

Those more likely to be affected by IHT were also more likely to give gifts of this size, with 51% of over-60s with substantial wealth doing so.

IHT is applied at 40% on the value of an estate that exceeds £325,000, although this threshold can change under certain circumstances.

Certain types of gifts, including those made within seven years of the person's death, may be considered a part of the estate and are taxed as such.

There are, however, some exceptions, depending on when the gift was made, the type of gift and its value and it is wise to familiarise yourself with these rules when contemplating making a gift.

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