How much can I give as gifts each year?
Annual exemption: You can give away a total of £3,000 worth of gifts each tax year without them being added to the value of your estate. This is known as your ‘annual exemption’.
Small gift allowance: You can give as many gifts of up to £250 per person as you want each tax year, as long as you have not used another allowance on the same person. Birthday or Christmas gifts you give from your regular income are exempt from Inheritance Tax.
Gifts for weddings or civil partnerships: Each tax year, you can give a tax free gift to someone who is getting married or starting a civil partnership. You can give up to:
£5,000 to a child
£2,500 to a grandchild or great-grandchild
£1,000 to any other person
Regular payments/Excess Income Gifting: You can make regular payments to another person, for example to help with their living costs. There’s no limit to how much you can give tax free, as long as:
- you can afford the payments after meeting your usual living costs
- you pay from your regular monthly income
These are known as ‘normal expenditure out of income’. They can include: paying rent for your child, paying into a savings account for a child under 18, giving financial support to an elderly relative
If you’re giving gifts to the same person, you can combine ‘normal expenditure out of income’ with any other allowance, except for the small gift allowance.
