A lot of people think £3,000 is the limit you can gift each year.  But it isn’t!

That figure comes up quite a bit, but it’s not a cap, it’s an allowance. You can gift £3,000 each tax year without it being added back into your estate for inheritance tax purposes. That’s known as the annual exemption.

But you’re not restricted to that amount. You can gift more than £3,000.  In fact, you can make much larger gifts if you want to.

The difference is how those gifts are treated if you die within seven years.  Anything above the exemption may be counted back into your estate and could affect how much inheritance tax is payable, depending on the value of your estate and the available thresholds.

There’s more flexibility too:

• You can carry forward one year of unused allowance.
• Certain gifts are exempt, like small gifts or wedding gifts.
• Regular gifts from surplus income can fall outside your estate entirely.

So, the £3,000 figure isn’t a limit, it’s just one part of a much bigger picture. Getting this right matters.

Done properly, gifting can reduce risk, create clarity and save a significant amount of Inheritance Tax. With gifting you can make a transformative difference for your family, not just later on, but now.

Are you thinking about gifting? Get in touch with a friendly, knowledgeable member of our Wills, Trusts and Probate team today and we’ll talk through everything with you.