Introducing RentalBux: Our MTD Software for Landlords
Generic software doesn't understand property businesses and require manual intervention to meet deadlines. That's why we developed RentalBux!
Reduce Your Estate with Tax‑Free Gifting
Gifts & Exemptions
Gifting is one of the simplest ways to reduce the value of your estate for Inheritance Tax (IHT). The UK tax system offers several allowances and exemptions that let you give money or property away without creating tax liability. Used correctly, these exemptions can dramatically reduce your IHT exposure and support loved ones during your lifetime.
Estate Tax Reliefs
Understanding Inheritance Tax Exemptions
You can give away up to £3,000 in total each tax year without it affecting your Nil Rate Band. You may split this allowance between multiple people, and any unused portion can be carried forward for one year.
For example, if you gave £2,000 in one year, you could gift up to £4,000 the following year without affecting your nil rate band.
You can give as many gifts of up to £250 per person as you like each tax year, as long as you have not used another allowance on the same person. Birthday or Christmas presents funded from your normal income are also exempt.
Tax‑free wedding gifts are permitted up to the following amounts:
You can combine a wedding gift allowance with your annual exemption for the same person in the same tax year.
You can make unlimited tax‑free regular payments to support someone else’s living costs, provided they come from your surplus income and do not reduce your standard of living. Examples include paying rent for your child or contributing to an elderly relative’s expenses. These payments can be combined with other allowances but not with the small gift allowance.
The 7‑Year Rule and Taper Relief
Gifts that do not qualify for any exemption become potentially exempt transfers (PETs). If you survive for 7 years after making the gift, it is outside your estate. If you die within 7 years, taper relief reduces the tax payable on gifts given more than 3 years before your death:
Years between gift and death
IHT Rate
0–3 years | 40% |
3–4 years | 32% |
4–5 years | 24% |
5–6 years | 16% |
6–7 years | 8% |
7+ years | 0% |
Gifts made more than 7 years before death are completely free of IHT. However, if you continue to benefit from the gift (for example, living in a house you have given away), the gift is subject to the gift with reservation rules. See our GWR & POAT page for details.
Common Issues and How We Help
Common Issues
How UKPA Helps
Frequently Asked Questions
You receive 50% relief on controlling shareholdings in a listed company and on land, buildings or machinery used in a business you were a partner in or controlled.
APR applies to land and farm buildings used for agriculture. Relief is 100% when the owner farmed the land, it was on a post‑1995 tenancy or a grazing licence. In other cases the relief is 50%. The land must generally have been owned and occupied for 2 years (if farmed by the owner) or 7 years (if occupied by someone else).
Currently there is no monetary cap, but from April 2026 the government plans to restrict 100% relief to the first £1 million of combined BPR and APR assets, with 50% relief applying thereafter.
No. You cannot claim BPR on the value of an asset that already qualifies for APR. However, if an asset is not fully covered by APR, you may be able to claim BPR on the remaining value.
Start Your Gifting Plan Today
By using exemptions and allowances effectively, you can provide financial support to your loved ones while reducing your estate for IHT. Our advisers will help you structure gifts, document them properly and integrate them with your broader estate plan.
What our clients say about us
Testimonials
Rendering the best service with a team of qualified and regulated accountants and tax advisers.
Our Process
How We Work
Our work is centred around efficiency, collaboration, and delivering exceptional results to our clients.
Initial Discovery Call
We start with a straightforward process. Answer a few simple questions to help us understand your circumstances. It’s hassle-free, quick and designed to save you time.
Data Gathering and Analysis
Once we have the details, our team of experienced accountants gets to work. You can trust us to manage the complexities and ensure everything is accurate and compliant.
Thorough Review & Timely Submission
We conduct a meticulous review to ensure accuracy, compliance, and completeness in every submission. Our streamlined process guarantees timely submissions, so you never miss a deadline.
Ongoing Support
Our commitment extends beyond accounting and tax advisory work. We provide ongoing support, including tax planning and addressing accounting queries throughout the year.
UK Property Accountants is a leading firm of chartered certified accountants and chartered tax advisers specialising in the property and real estate sector with head office in Central London.
© 2026 UK Property Accountants | All Rights Reserved