End of tax year IHT recap – gen up on gifting allowances

Here’s a reminder of the vital gifting numbers to gen up on before the end of the tax year:

  • You can make gifts worth up to £3,000 in each tax year. These gifts will be exempt from Inheritance Tax (IHT) on your death, even if you die within the seven-year period that otherwise applies to lifetime gifts. You can carry forward any unused part of the £3,000 exemption to the following year but if you don’t use it in that year, the exemption will expire.
  • Certain gifts don’t eat into this annual exemption and don’t give rise to IHT, e.g. wedding gifts of up to £5,000 for a child, £2,500 for a grandchild (or great grandchild) and £1,000 for anyone else. Individual gifts worth up to £250 per year per recipient are also IHT free.

While these are relatively small sums, you should use these up where possible without compromising your own financial security, to gradually reduce your overall estate. A settled pattern of gifts from surplus income can also be made. Conditions apply, and advice would be needed to ensure that the gifts are made and evidenced in the right way.

The Financial Conduct Authority (FCA) does not regulate tax advice and estate planning.

Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed.