How much can you gift tax free in the UK?

Mostly through Inheritance Tax. It may have to be paid after your death on some of the gifts you made during your lifetime.

A gift made less than 7 years before your death may be taxed. That depends on who received it and how they're related to you, what it was worth and when you gave it.

A gift can be money, household and personal goods (such as furniture, jewellery or antiques), a house, land or buildings. Stocks and shares listed on the London Stock Exchange count too.

Selling something for less than it's worth can also count. If you sell your house to your child below its market value, the difference counts as a gift. What you leave in your will isn't a gift: it's part of your estate.

Some gifts are exempt straight away, because of who gets them or because they fit an allowance. A gift to another person that an exemption doesn't fully cover is usually a potentially exempt transfer (PET). No tax is due on it if you live for 7 years after making it.

Gifts between spouses or civil partners are free of Inheritance Tax. You can give each other as much as you like during your lifetime.

There are two conditions. Your husband, wife or civil partner must live in the UK permanently, and you must be legally married or in a civil partnership.

The exemption comes from section 18 of the Inheritance Tax Act 1984. It covers a gift as far as it becomes part of your spouse's or civil partner's estate.

If you're a long-term UK resident but your spouse or civil partner isn't, the exempt amount is capped. The cap is the exemption limit at the time of the gift.

Any gift you give to a charity or political party is free of Inheritance Tax too.

Gifts to your husband, wife, civil partner or a charity are usually free of Capital Gains Tax as well. The exceptions are in gifts of property and Capital Gains Tax.

You can give away £3,000 in total each tax year under your annual exemption. Gifts within it aren't added to the value of your estate.

You can give the whole £3,000 to one person or split it between several. The tax year runs from 6 April to 5 April the following year.

The limit applies to what you give in total, not to what each person receives. Section 19 of the Inheritance Tax Act 1984 sets it at £3,000 for each giver, and HMRC's guidance says the same.

If you don't use all of it, you can carry the rest forward, but only to the next tax year. HMRC uses the current year's allowance first, then anything left from the year before. Anything older is lost.

1. Year one In the 2023 to 2024 tax year, Mark gave £2,000 to his daughter Jane, which left £1,000 of his annual exemption unused.
2. Year two In the 2024 to 2025 tax year, he gave £4,000 to his other daughter, Sarah. This used his £3,000 annual exemption for that year plus the £1,000 left over from the year before.
3. The result Even if Mark dies within 7 years of these gifts, there's no Inheritance Tax to pay on them.

A gift bigger than the allowance you have left still uses it. The gift is exempt up to the amount left, and only the excess becomes a potentially exempt transfer (or an immediately chargeable transfer).

You can give up to £250 a tax year to as many people as you like. This is the small gift allowance, and it only works for someone you haven't used another allowance on. Section 20 of the Inheritance Tax Act 1984 sets the limit.

If your gifts to one person in a tax year come to more than £250, you lose the small gifts exemption for that person altogether. Unlike the annual exemption, it doesn't cover part of a larger gift, and you can't carry it forward.

Birthday or Christmas presents you give from your regular income are exempt from Inheritance Tax too.

You can also give a tax-free gift to someone who's getting married or starting a civil partnership. How much depends on who they are to you:

The limits come from section 22 of the Inheritance Tax Act 1984. The £2,500 limit also applies when one of the couple gives a gift to the other. Here, a "child" includes an adopted child or a step-child.

To qualify, the gift must be made on or shortly before the wedding or civil partnership, to one or both of the couple. It must become fully effective when the marriage or civil partnership takes place.

If you give more than the limit, only the amount up to the limit is exempt.

You can combine a wedding gift allowance with any other allowance for the same person, except the small gift allowance. For example, in the same tax year you can give your child a £5,000 wedding gift and £3,000 under your annual exemption.

Yes, with no set limit, if you pay them from your regular monthly income. You must still be able to afford your usual living costs after them. This is known as "normal expenditure out of income".

Examples include paying rent for your child, paying into a savings account for a child under 18 and giving financial support to an elderly relative.

HMRC sets three conditions. To be exempt, the gift must:

• form part of your normal expenditure
• be made out of your income
• leave you with enough income to keep up your normal standard of living

Income here means your net income, after Income Tax. Common sources are earnings from a job or self-employment, rent from property, pensions, interest and dividends.

A gift of capital assets, such as jewellery or securities, doesn't qualify unless you bought it out of income specifically to give it away. Income you save up doesn't count for ever: unless there's evidence otherwise, HMRC treats it as capital after two years.

There's no set time span for showing a pattern of giving, but HMRC says three to four years would normally be reasonable. A pattern is harder to show for a single gift, especially one made close to death.

You can combine regular gifts from income with any other allowance for the same person, except the small gift allowance. For example, in the same tax year you can give your child £60 a month (£720 a year) plus £3,000 under your annual exemption.

Life insurance premiums can count as regular gifts. Aviva says that once your policy is in trust and you can no longer benefit from it, HMRC treats the premiums as gifts. They'll usually be exempt as normal expenditure or under the annual exemption.

HMRC may accept even the first of a series of premiums as normal expenditure. Premiums on a policy taken out when the person's life expectancy was very short don't count. Our guide to life insurance in trust explains how trusts work.

It depends on how long you live after making the gift. If you live for 7 years after giving it, no tax is due, unless the gift is part of a trust. This is the 7 year rule.

If you die within 7 years and tax is due on a gift, the amount depends on when you gave it. Gifts made in the 3 years before your death are taxed at 40%. Gifts made 3 to 7 years before are taxed on a sliding scale called taper relief.

0%

10%

20%

30%

40%

40%

32%

24%

16%

8%

0%

Less than 3 years 3 to 4 years 4 to 5 years 5 to 6 years 6 to 7 years 7 or more years

Tax rate on a gift if you die within 7 years of giving it

	Rate of tax on the gift
Less than 3 years	40%
3 to 4 years	32%
4 to 5 years	24%
5 to 6 years	16%
6 to 7 years	8%
7 or more years	0%

Rates as published on GOV.UK, checked on 2 October 2026.

Taper relief only applies if your gifts in the 7 years before you die add up to more than £325,000. That tax-free threshold is called the nil rate band. It stays at £325,000 from 6 April 2009 to 5 April 2031.

The same total decides who pays. Tax due on gifts is usually paid by the estate. That changes if you gave away more than £325,000 in the 7 years before your death. Then anyone who got a gift from you in those years pays the tax on it.

HMRC's form IHT403 also says the people who received the gifts are liable for any Inheritance Tax due on them.

In GOV.UK's example, Sally wasn't married or in a civil partnership when she died. She'd made three gifts in the 9 years before her death:

1. £50,000 to her brother, 9 years before her death No Inheritance Tax, because the gift was given more than 7 years before she died.
2. £325,000 to her sister, 4 years and 2 months before No Inheritance Tax, because the gift was within the Inheritance Tax threshold.
3. £100,000 to her friend, 3 years before Her friend pays Inheritance Tax at 32%, which is £32,000, because the gift was above the tax-free threshold and given 3 years before Sally died.
4. Her estate Her remaining estate of £400,000 pays 40% Inheritance Tax on the whole amount, which is £160,000.

Gifts into a trust have their own rules. For most trusts, Inheritance Tax is due once your transfers into trust go over the £325,000 threshold, at 20% if the trustees pay. Transfers into a bare trust may be exempt if you live for 7 years after making them.

There can be. Capital Gains Tax (a separate tax from Inheritance Tax) is paid on the gain when you sell or "dispose of" an asset. Giving it away or transferring it to someone else counts as disposing of it.

The tax is on the gain, which is usually the difference between what you paid for an asset and what you sold it for. For a gift, you use the market value on the date of the gift instead, even though no money changes hands.

Chargeable assets (the ones Capital Gains Tax applies to) include:

• most personal possessions worth £6,000 or more, apart from your car
• property that is not your main home
• your main home if you have let it out, used it for business or it is very large
• shares that are not in an ISA or PEP
• business assets and cryptoassets

So giving away a property that isn't your home may leave you with a gain to work out. That includes a buy-to-let, business premises, land or a property you inherited.

You only pay Capital Gains Tax on your total gains above an annual tax-free allowance. Depending on the asset, you may be able to claim a relief that reduces the tax.

You don't pay Capital Gains Tax on assets you give to your husband, wife or civil partner. There are two exceptions: you'd separated and didn't live together at all that tax year, or you gave them goods to sell on in their business.

They may have to pay tax on any gain if they later dispose of the asset, worked out from its value when you first owned it. Gifts to charity are free of Capital Gains Tax too. Gifts to anyone else follow the normal rules.

If you give away business assets, including certain shares, you may be able to claim Gift Hold-Over Relief. You then pay no Capital Gains Tax on the gift, and the person who gets it pays any tax due when they later sell. You claim the relief jointly with them.

Yes. Term insurance is often used to cover possible Inheritance Tax on large gifts made in the last 7 years.

The tax can fall on the people you gave to. Once your gifts in the 7 years before your death go over £325,000, each person who got a gift in that time pays Inheritance Tax on it.

Gift inter vivos insurance is a kind of decreasing term cover, where the payout falls over the term. If you give away money or assets and die within 7 years, it can cover the Inheritance Tax that may be due. Our gift inter vivos guide explains how it works.

LV= sells a Gift Inter Vivos plan, which its product profile says must only be sold on an advised basis. The plan pays a lump sum on death.

LV= says to use it only when the gift is worth more than the current nil rate band, or when gifts in the previous 7 years already exceed it.

The plan covers a single life and the cover decreases in line with taper relief. LV= pays all of the cover for a death in the first 3 years, then less each year, and nothing after 7 years:

The plan can be on your own life if it's written into a trust, or the person who received the gift can take it out on your life. To apply, LV= says you must live permanently in the UK and be aged between 17 and 79.

Aviva builds a related option into its Life Insurance+ policy instead. A gift inter vivos benefit comes with joint life second event cover. It lets you exchange some or all of your cover to help cover a possible Inheritance Tax bill.

If you make a gift, you can reduce your existing cover and take out new cover. The new cover can go up to the Inheritance Tax the gift could create. Aviva sets up five new policies with terms of 3, 4, 5, 6 and 7 years.

You must take them out within 180 days of the gift, and there are no further health and lifestyle questions. You can't increase your total cover this way. The benefit isn't available to everyone: your policy schedule shows whether it's included.

Whole of life insurance pays out whenever you die, as long as you keep up the premiums. It's often used for Inheritance Tax planning. See whole life insurance, or estimate the Inheritance Tax on your estate with our whole of life insurance calculator.

If you don't name a beneficiary, the insurer pays the money into your estate, where Inheritance Tax could apply. A policy in trust isn't part of your estate, so it can cover a possible Inheritance Tax bill without adding to it. More in is life insurance taxable? and life insurance in trust.

GOV.UK says a solicitor or tax adviser can give you professional advice on what you can give away tax free during your lifetime.

Usually not by you. Gifts are normally reported after the giver's death, by the person who deals with their estate. They'll need to work out what gifts were made in the 7 years before the death.

They use HMRC's form IHT403 to tell HMRC about them. The form says to leave out gifts totalling £3,000 or less in any tax year, small amounts of £250 or less and gifts to a spouse or civil partner.

GOV.UK says to keep a record of:

• what you gave and who you gave it to
• the value of the gift
• when you gave it

Regular gifts out of income need more records. If they're claimed as normal expenditure out of income, IHT403 asks for the giver's income and spending for each year the gifts were made.