04: Exemptions
Some gifts are always exempt from IHT and it is a good idea to use them. The main ones are:
- Transfers between husband and wife, and between same-sex partners registered under the Civil Partnership Act. Lifetime gifts and transfers on death are both exempt.
- The annual exemption of £3,000 each tax year. If you do not use up the exemption in a year you can carry it forward, but only for one year.
- Any number of small gifts of up to £250 per donee in a tax year.
- Regular gifts from your income, provided they do not reduce your usual standard of living.
- Wedding gifts up to a limit that depends on the relationship of the donor to the bride or groom.
- Gifts and bequests to UK charities, political parties and for the public benefit. Making use of these exemptions should form part of your inheritance tax planning.
