Giving More Than Presents: Smart Gifting and Inheritance Tax
October 27, 2026
Christmas is a time for giving, and for many families, it’s also a good moment to think about giving in a bigger way. Smart gifting can help the people you love now, while reducing the inheritance tax your estate may face later.
How gifting and inheritance tax work
Many gifts you make in your lifetime fall outside your estate if you live for seven years after making them. But some gifts are exempt straight away, and these are often overlooked:
- Annual exemption: you can give away £3,000 each tax year, and carry forward any unused amount for one year
- Small gifts: up to £250 per person, to as many people as you like
- Wedding gifts: up to £5,000 to a child or £2,500 to a grandchild
- Gifts from surplus income: regular gifts from income, rather than savings, can be exempt with no limit, as long as they don’t affect your standard of living
Used together, and year after year, these allowances can move a meaningful amount of wealth to the next generation.
Giving with a plan
The key is making sure you can afford to give. Gifting too much, too soon, could leave you short in later life. Good planning looks at your income, your pension, your care needs and your long-term goals before deciding how much to give and when. Some families also use trusts to keep more control over how gifts are used.
Keeping clear records also matters. Your executors will need to show which gifts were exempt, especially gifts from surplus income.
Start the conversation this Christmas
If you’d like to help your family while protecting your own future, KPW Investments can help you build a gifting plan that works for everyone. [Book a no-obligation conversation with our team →]
📞 Tel: 0141 248 4982
📩https://kpwinvestments.co.uk/book-appointment/
Tax treatment depends on your individual circumstances and may change in future. The value of investments can fall as well as rise. This article does not constitute tax or financial advice.
