Inheritance Tax on Gifts
How much you can give away each year free of Inheritance Tax, the extra allowances for wedding gifts, and how gifts are taxed if you die within 7 years.
Annual exemption
£3,000
The total you can give away each tax year without it counting towards your estate. Any unused amount carries forward one tax year only.
GOV.UK — HMRC · checked 10 Nov 2026
Small gift allowance (per person)
£250
You can give as many gifts of up to this per person as you like each tax year, as long as no other allowance is used on the same person.
GOV.UK — HMRC · checked 10 Nov 2026
Wedding or civil partnership gift to a child
£5,000
Can be combined with the annual exemption for the same person, but not with the small gift allowance.
GOV.UK — HMRC · checked 10 Nov 2026
Wedding gift to a grandchild or great-grandchild
£2,500
The tax-free limit for a gift to a grandchild or great-grandchild who is getting married or forming a civil partnership.
GOV.UK — HMRC · checked 10 Nov 2026
Wedding gift to anyone else
£1,000
The tax-free limit for a wedding or civil partnership gift to anyone other than a child or grandchild.
GOV.UK — HMRC · checked 10 Nov 2026
Years you must live after a gift
7 years
No Inheritance Tax is due on a gift if you live this long after giving it, unless the gift is part of a trust.
GOV.UK — HMRC · checked 10 Nov 2026
Tax on gifts made 3 to 4 years before death
32%
Taper relief only applies if gifts made in the 7 years before death total more than the £325,000 threshold.
GOV.UK — HMRC · checked 10 Nov 2026
Tax on gifts made 4 to 5 years before death
24%
The rate falls the longer you live after making the gift.
GOV.UK — HMRC · checked 10 Nov 2026
Tax on gifts made 5 to 6 years before death
16%
The rate falls the longer you live after making the gift.
GOV.UK — HMRC · checked 10 Nov 2026
Tax on gifts made 6 to 7 years before death
8%
After 7 years, no Inheritance Tax is due on the gift.
GOV.UK — HMRC · checked 10 Nov 2026
Standard rate
40%
Gifts made less than 3 years before death are taxed at the full rate.
GOV.UK — HMRC · checked 10 Nov 2026
Nil-rate band
£325,000
If gifts in the 7 years before death total more than this, the people who received them pay Inheritance Tax on their gifts.
GOV.UK — HMRC · checked 10 Nov 2026