Inheritance tax: how much you can gift

Published by The Moneywise Team on 23 April 2019.
Last updated on 23 April 2019

Everyone is allowed to give away money every year with that amount immediately leaving their estate and no longer being liable for inheritance tax.

A number of different gifts are allowed:

• £3,000 – This is your annual exemption. You can give anything up to this amount away every tax year.

• Up to £250 – You can also give away as many gifts of up to £250, as long as it doesn’t go to someone who has already benefited from a gift out of your annual exemption.

• £1,000 – When someone gets married or enters a civil partnership, you can give them up to £1,000 (£2,500 if they are your grandchild or great-grandchild, and £5,000 for a child).

• Gifts out of income – You can give away regular gifts out of your income as long as it doesn’t affect your standard of living.

• Living costs – You can make payments to help with an elderly relative’s living costs or a child under 18.

Other tax allowances you need to know for 2019/20

Tax allowance 2018/19 rate 2019/20 rate
Personal allowance £11,850 £12,500
Higher income tax band £46,351 to £150,000 £50,001 to £150,000
Isa £20,000 £20,000
Junior Isa  £4,260 £4,368
Capital gains  £11,700 £12,000
Pension annual allowance £40,000 £40,000
Pension lifetime allowance  £1,030,000 £1,055,000
Inheritance tax (IHT) nil-rate band £325,000 £325,000
IHT residence nil-rate band £125,000 £150,000, 11 March 2019

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