Death tax dash as families scramble to make most of Donald Trump chaos | Personal Finance | Finance

Families are cashing in on the market changes unleashed by Donald Trump’s tariffs to slash their inheritance tax bills — by gifting assets while prices are down.

Financial experts say changing stock markets have handed wealthy investors a chance to pass on shares and other assets to their loved ones at a fraction of their usual tax cost.

Since Mr Trump’s hardline tariff moves on trading partners triggered turmoil on global markets, share values have tumbled — and smart investors are moving fast.

They’re locking in lower valuations now to reduce the eventual cost of death duties, often saving tens of thousands of pounds.

Ian Cook, of wealth managers Quilter Cheviot, revealed that some clients had already banked major savings.

“If the circumstances are right then it’s a shrewd strategy,” he told the Telegraph. “But it’s difficult to deploy because markets move so quickly.

“In the case of the stock market, now is the perfect time to do it as you get a double whammy – a saving on capital gains tax in the short term, and then a long-term potential benefit on inheritance tax.”

“We’re having conversations about how to mitigate tax and gifting – and the more savvy clients are seizing this golden opportunity,” said Rachael Griffin, a tax and financial planning expert at Quilter.

The tax move works because the value of a gifted asset is recorded at the time it is handed over — so if shares are at a low ebb now, that’s the figure used for inheritance tax purposes, even if they soar in future.

The most commonly used tactic is the “seven-year rule”. If you give something away and live for seven more years, there’s no inheritance tax to pay. Die within that window, and the tax applies on a sliding scale.

“Shares are the more obvious choice as the stock market is more volatile, but you can do this with any asset whose value falls,” added Ms Griffin.

“The important thing is to document the value of your asset – a house or a company that’s harder to value than shares, so you might want to get evaluators in.”

Inheritance tax — often dubbed the most hated levy in Britain — bites at 40% on estates worth over £325,000, with an extra £175,000 allowance if you leave your main home to children or grandchildren.

But it’s not just inheritance tax at play. By handing over assets while they’re worth less, families can also reduce capital gains tax — which kicks in when an asset is sold or transferred and has grown in value.

Capital gains tax is triggered once you’ve exceeded the annual exempt allowance of £3,000. Basic-rate taxpayers pay 18% on gains, while higher earners pay 24%.