Annual Gift Exemption: Who Qualifies and What You Get
Learn how you can give away money each year without triggering Inheritance Tax using the Annual Gift Exemption.
The Annual Gift Exemption allows you to give away a certain amount of money each year without that gift being subject to Inheritance Tax.
Who it's for
This applies to anyone who is giving away money to another person.
What you get
You can give away up to £3,000 every year that is exempt from Inheritance Tax. This allows you to transfer wealth to others while reducing the total value of your estate for tax purposes.
What it costs you
There is no cost to use this exemption.
The catch to know
If you do not use your full allowance in a single year, you can carry forward the unused portion to the next tax year. This means you can potentially use two years' worth of exemptions at once.
How to apply
- Determine how much you want to gift.
- Check if you have any unused allowance from the previous year.
- Make the transfer to the recipient.
- Keep a record of the gift for your own tax records.