How can we avoid inheritance tax?

Q My 78-year-old mother wishes to transfer money into my name rather than my brother's so that I gain it on her death. What is it possible for her to do without paying inheritance tax?

I assume not life insurance at her age because, as I understand it, if she lived past 90, then nothing would come my way and she would lose all the premiums paid in. Is it possible to pay into something that can be mine and not my brother's on her death?

IH

A There seem to be a few misconceptions. In the normal manner of things, your mother can leave her money to whoever she likes in her Will. If the value of her estate exceeds the inheritance tax exemption limit (currently £263,000) on death there would be a liability to pay tax which would hit you most as the chief beneficiary. If your mother transfers money to you now, the gift could be subject to inheritance tax if she dies before seven years and the value of her estate exceeds the exemption allowance.

A life assurance policy, written in trust, could be used to offset any potential inheritance tax liability on death. There is no rule to say that payment of claims on death stops when the policyholder reaches 90. However at her age the premiums could be a bit expensive. She could use her annual inheritance tax allowance of £3,000 to cover the premiums and in this way make a delayed gift to you tax-free.