Not all gifts made during a person’s lifetime are subject to Inheritance Tax when they die. A number of specific exemptions mean that certain types of gift fall completely outside the IHT calculation.

Why gifts matter for IHT

Gifts made in the seven years before death are potentially chargeable as part of the estate. But gifts qualifying for an exemption are excluded entirely. Accurately identifying exempt gifts is an important part of getting the IHT400 right.

Key gift exemptions (an overview)

Annual gift exemption

Each person can give away a set amount per tax year free of IHT. Unused annual exemption from the previous year can also be carried forward once.

Small gifts exemption

Outright gifts up to a certain amount per recipient per tax year are also exempt. No limit on the number of recipients.

Gifts for weddings and civil partnerships

Gifts made on the occasion of a marriage or civil partnership are exempt up to amounts that vary by relationship.

Normal expenditure out of income

Gifts forming part of regular expenditure from income (not capital) that do not reduce the giver’s standard of living may qualify as exempt. The rules are detailed and require careful supporting evidence.

Gifts between spouses and civil partners

Generally exempt from IHT, provided the recipient is UK-domiciled.

Gifts to charity

Gifts to qualifying UK charities are exempt, with no upper limit.

YouCanDoProbate captures gift information through a structured gifts section and applies the appropriate exemptions automatically from your answers.