In many cases, IHT planning involves reducing the estate by gifting. The IHT code offers a range of exemptions, some of which are tax year sensitive. For example, the annual £3,000 exemption and the small gifts exemption of £250. Using IHT exemptions to fund contributions to other people's pensions is explored in the 'Inheritance tax and pensions' article. In an ideal world, IHT planning should be undertaken sooner rather than later and larger gifts should be made as soon as possible so that the 'seven year clock' starts ticking.