Gifts to Family

Gifts of any amount can be given with no immediate IHT liability. To be effective for IHT the gift must be ‘irrevocable’. The donor (person making the gift) is required to survive a seven-year period to make this gift exempt. This is called a Potentially Exempt Transfer (PET) and is added back to the estate in full if the value of the gift is less than the nil rate band, £325,000, and death occurs within the seven-year period. Gifts of more than £325,000 benefit from tapering relief between years 3-7 where the amount added back at death is reduced on a sliding scale.