Wedding Costs & IHT

[Kevinm]

Hello
My daughter is due to get married in 2027.
We her parents intend to pay the suppliers direct for her wedding costs which maybe £30,000 .
Can we do this & also gift her £5,000 each at the time of the wedding free of IHT ?
Or is paying for the Wedding direct eating up the £5,000 each allowance ?
Thank you

[AGoodman]

You would probably treat the entire £35k as a gift with the following exemptions:

£5,000 each exemption for gift in consideration of marriage
£3,000 each annual exemption
£3,000 each for last years' annual exemption if you didn't use it

So £22,000 could be exempt and the remaining £13,000 would be a PET (exempt provided you survive for 7 years).

It doesn't really matter how you allocate the exemptions.

If you really wanted to maximise it, you could also each give the future son-in-law £1,000, which would be another £2,000 exemption in consideration of marriage.

[strawn]

If you really wanted to maximise it, you could also each give the future son-in-law £1,000, which would be another £2,000 exemption in consideration of marriage.

And you could each give him £250 in this tax year and next - that too would be exempt.

[Kevinm]

Thank you for replies very helpful re son in law .
Unfortunately annual exemptions being used elsewhere so big gap to full cost of wedding.
Seems harsh in that it is my wife & I who are suggesting the expensive wedding so for our benefit not my daughters.
Maybe have to be a "not the wedding party" at our house !

[AGoodman]

Look at it this way: if you kept the money and didn't spend it on yourselves, it would definitely be taken into account for IHT on your death. At least by giving it away now, (I assume) you have a good chance of surviving the 7 years and taking it out of your estate for IHT.