What doesn't my estate pay tax on?
Marriage Gifts Exemption
Parents can make wedding gifts of up to £5,000 to each of their children. Other relatives e.g. grandparents, can also make gifts. They can give up to £2,500 to each marrying grandchild. Also, you can give up to £1,000 as a wedding gift to anyone else. The gifts must be made before the wedding day, not after.
Small Gifts Exemption
You can make any number of gifts to different people up to a value of £250 each in any tax year.
Other Gift Exemptions
You can make any number of gifts of any amount out of your surplus income. In other words, as long as the gift is not coming from your capital or savings and your income can be proven to have funded the gift then it is permissible. If surplus income allows a scheme of giving can be set providing support for a family member for example and the funds outlaid will not be brought into your estates value from an IHT perspective.
Other gifts that are permissible are gifts to charities and political parties. Also acceptable are gifts to Trusts for the vulnerable.
Business and Agricultural Relief
Interests held for more than 2 years in a business, farms or shares in qualifying unlisted companies and let farmland held for more than 7 years qualify for in some cases 100% relief. Assets used by a qualifying company or business, or a controlling holding in a listed company qualify for 50% relief.
