Understanding Gifting and Inheritance Tax in the UK: What You Need to Know

When planning for your family’s future, gifting is a powerful way to support your loved ones. However, the way you give—when and how—can have a significant impact on inheritance tax (IHT).

At Kirsty’s Law Ltd, we help families in Llanelli, Swansea, and Carmarthen navigate these rules with confidence and peace of mind.

For inheritance tax purposes, a “gift” isn’t just about handing over cash. It can include:

If you transfer something of value to someone else without receiving something of equal value in return, HMRC will likely consider it a gift.

Each tax year, you can give away up to £3,000 without it being added to your estate for inheritance tax—this is your “annual exemption.”
If you didn’t use last year’s exemption, you can carry it forward, meaning you could give away up to £6,000 in one year. This is a simple, effective way to reduce the value of your estate over time.

Gifts between married couples and civil partners are usually exempt from inheritance tax, as long as both parties are UK-domiciled. This can be a useful way to organise your estate and ensure your assets pass smoothly to your partner.

Larger gifts can also be exempt from inheritance tax—but only if you survive for seven years after making the gift.
If you pass away within seven years, some or all of the gift’s value may still be included in your estate for tax purposes. However, the tax owed can reduce on a sliding scale, depending on how many years have passed since the gift was made.

You can also give small gifts for special occasions—like birthdays, weddings, or Christmas—without worrying about inheritance tax.
For example:

These exemptions are a great way to support your loved ones at important milestones.

Inheritance tax can seem overwhelming, but with the right advice, you can make the most of the exemptions and rules available. Whether you want to help your children onto the property ladder, support grandchildren, or simply enjoy sharing your wealth, careful planning ensures your gifts are both generous and tax-efficient.

At Kirsty’s Law Ltd, we specialise in estate planning for blended families and people over 40 in Llanelli, Swansea, Carmarthen, and beyond. We offer free consultations and pride ourselves on our personal, friendly service. If you have questions about gifting, inheritance tax, or any aspect of estate planning, we’re here to help.

Contact us today:
📞 01554 700502
📧 info@kirstyslaw.co.uk
🏢 First Floor, St Elli Shopping Centre, Llanelli SA15 1SH
🌐 www.kirstyslaw.co.uk

Let’s make sure your wishes are protected and your family’s future is secure.