Small Gifts & Other Exemptions

Key facts

You can give up to £250 per person per tax year free of IHT (small gifts exemption).
The £250 exemption cannot be combined with the annual exemption for the same person.
Wedding gifts are exempt up to £5,000 (parent), £2,500 (grandparent), or £1,000 (anyone else).
Gifts to UK-registered charities are fully exempt.
Gifts between spouses/civil partners are fully exempt (unlimited amount).

IHT Gift Exemptions at a Glance

Beyond the £3,000 annual exemption, several specific exemptions allow you to make gifts free of Inheritance Tax:^[1]

Exemption	Amount	Key Condition
Small gifts exemption	£250 per recipient per year	Total gifts to that person must not exceed £250
Wedding/civil partnership — parent	£5,000	Gift must be in consideration of the marriage
Wedding/civil partnership — grandparent	£2,500	Gift must be in consideration of the marriage
Wedding/civil partnership — anyone else	£1,000	Gift must be in consideration of the marriage
Gifts to UK charities	Unlimited	Charity must be UK-registered
Gifts between spouses/civil partners	Unlimited	Both must be UK-domiciled (or the £325,000 limit applies)
Gifts to political parties	Unlimited	Party must have at least 2 MPs (or 1 MP and 150,000+ votes)
Gifts for national benefit	Unlimited	Museums, universities, National Trust, etc.

The Small Gifts Exemption (£250)

You can make gifts of up to £250 to as many different people as you wish in each tax year, and each gift is completely exempt from IHT. There is no overall limit on the number of recipients.^[2]

Key rules:

The £250 limit applies per recipient per year
If you give more than £250 to a particular person, the entire amount fails to qualify (not just the excess)
It cannot be used to exempt part of a larger gift to the same person
It is separate from the annual exemption — but cannot be combined on the same person

Example: You give £3,000 to your daughter (covered by the annual exemption) and £250 each to your five grandchildren (covered by the small gifts exemption). Total gifts: £4,250, all fully exempt.

Wedding and Civil Partnership Gifts

Gifts made in consideration of a marriage or civil partnership are exempt up to the following limits:^[3]

£5,000 from each parent of the bride or groom
£2,500 from each grandparent or great-grandparent
£1,000 from anyone else

The gift must be made before or on the day of the ceremony (or within a reasonable period beforehand). If the marriage does not take place, the exemption does not apply.

These limits are per donor per marriage. Both parents can each give £5,000, giving a combined £10,000 from both parents.

Gifts to Charity

Gifts to UK-registered charities are completely exempt from IHT, whether made during lifetime or on death. There is no limit on the amount. Additionally, leaving at least 10% of the net estate to charity can reduce the IHT rate on the remaining estate from 40% to 36%.^[1]

Spouse and Civil Partner Exemption

Transfers between spouses and civil partners are exempt from IHT without limit, provided both are UK-domiciled. If the recipient spouse is non-UK-domiciled, a limit of £325,000 applies (although they can elect to be treated as UK-domiciled for IHT purposes).^[1]

Combining Exemptions

You can use multiple exemptions in the same tax year, which can add up to significant tax-free giving:

Example — maximising exemptions in a year: A parent could give: £3,000 annual exemption + £3,000 carried forward + £5,000 wedding gift to a child getting married + £250 small gifts to each of 10 other relatives = £13,500 completely free of IHT, all in a single year.

Frequently Asked Questions

Can I give £250 to as many people as I like?

Yes. The £250 small gifts exemption applies per recipient. You can give £250 each to as many different people as you wish in a tax year, and every gift is exempt. However, if you give more than £250 to any single person, the entire gift to that person fails to qualify for this exemption.

Can I give someone £3,250 using both the annual and small gifts exemptions?

Not quite in the way you might expect. If you give someone £3,250, the £3,000 annual exemption covers £3,000 of it. The remaining £250 is not covered by the small gifts exemption because that exemption only applies where the total gifts to that person in the year are £250 or less. The excess £250 would be a PET.

What wedding gift exemptions are available?

For gifts made in consideration of marriage or civil partnership: parents can give up to £5,000, grandparents and great-grandparents up to £2,500, and anyone else up to £1,000. The gift must be made before or on the day of the ceremony (or within a reasonable time before).

Sources

Inheritance Tax: gifts — GOV.UK
IHTM14171 – Small gifts exemption — HMRC
IHTM14181 – Marriage/civil partnership exemption — HMRC