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Where Taxpayers and Advisers Meet

IHT Gifts

Joined:Tue Aug 27, 2019 6:54 am
IHT Gifts

Postby SunnySideUp101 » Tue Aug 27, 2019 7:17 am


I have consulted this page and have multiple questions on IHT and Gifts.

Could somebody provide some assistance?

1. There is no inheritance tax on gifts between spouses. So do I have to declare any such gifts at all?

2. There is no inheritance tax on gifts between spouses as long as they live in the UK permanently. Is this referring to whether they are UK domicile or resident?

3. The following exemption exists: "payments to help with another person’s living costs, such as an elderly relative or a child under 18"
What if the payment was to an unemployed relative on a monthly basis for a full year? Would this be exempt?

4. The following exemption exists: You can give as many gifts of up to £250 per person as you want during the tax year as long as you have not used another exemption on the same person.
What if the payment was £400 per month? Would the first £250 per exempt or would the whole £400 not be exempt because it is more than £250?

5. The following exemption exists: normal gifts out of your income, for example Christmas or birthday presents - you must be able to maintain your standard of living after making the gift
So could this be a regular some of say £500 per month as long as it was taken out of regular income.

6. On a monthly basis can the 3 above exemptions be used simultaneously and on top of that the £3000 tax free per year claimed?

Joined:Mon Mar 11, 2019 4:22 pm

Re: IHT Gifts

Postby Jholm » Tue Aug 27, 2019 8:09 am

1. No

2. Domicile. A non-domiciled spouse has a limit of £325,000 being exempt.

3. Provided the amount given is regular and habitual (eg. monthly) and comes from 'excess income' (i.e. doesn't reduce your quality of living), then exempt.

4. No. If over £250, the whole amount becomes a PET. You have an annual exemption of £3,000 however, and you can bring forward unused exemption from the previous year.

5. Covered above. 'Normal' as in regular gifts.

6. £3,000 exemption would be taken up by anything not covered by the other exemptions. Eg. give £250 to all your buddies and you can still use the £3,000. Give one buddy £500 as a one-off and your annual exemption would be reduced to £2,500.

Return to “Inheritance Tax, IHT, Trusts & Estates, Capital Taxes”