Many people would rather help their family now than leave everything in a will. The good news is that gifting can also reduce inheritance tax, as long as you understand the rules.
Gifts that are free of inheritance tax straight away
- Up to £3,000 a year in total, plus any unused allowance from the previous year
- Small gifts of up to £250 per person, per year
- Wedding gifts, up to set limits depending on your relationship
- Regular gifts from surplus income that don’t affect your standard of living
- Gifts between spouses and civil partners
The seven-year rule
Larger gifts to people are usually free of inheritance tax if you live for seven years after making them. If you die within seven years, the gift may count towards your estate. Taper relief can reduce the tax on gifts made between three and seven years before death.
Keep a recordWrite down what you give, to whom and when. It makes life far simpler for your executors.
Before you give
Make sure you can afford it. A cashflow plan can show how much you could give away without putting your own future at risk.
Last reviewed 12th October 2026. This is for general information only and isn’t personal financial advice. Tax rules can change, and how they apply depends on your circumstances. The value of investments can go down as well as up, so you could get back less than you put in.
