Gifts in consideration of marriage
As Pippa Middleton’s wedding and inheritances are currently trending in the news, it might be worth considering the gifts one can make to a couple getting married that are free of Inheritance Tax.
The amount that can be gifted tax-free depends on the relationship between the two parties.
- The gift must be made on the day of the wedding / civil ceremony, or shortly before that date
- Gifts made after the date of the wedding / civil ceremony do not count, unless they were made in fulfilment of a binding promise before marriage / civil partnership.
Each parent, including step-parents and adoptive parents, can give up to £5,000. Each grandparent (or a more remote relative) can give up to £2,500. Anyone else can gift up to £1,000.
It is worth remembering the following inheritance tax exemptions to which everyone is entitled:
- The Inheritance Tax annual exemption of £3,000, which means you can make gifts totalling £3,000 per year free of Inheritance Tax
- Any number of gifts, not exceeding £250 per recipient per tax year, can be made free of Inheritance Tax
- Gifts to spouses / civil partners, charities and political parties are exempt
- Regular gifts made out of surplus post-tax income are also immediately exempt.