IHTM14180 - Specific lifetime exemptions: small gifts exemption
Under IHTA84/S20, lifetime gifts
not exceeding £250 in total value made by one
individual to another in any one tax year are exempt. A tax year
runs from 6 April to 5 April the following year.
The exemption
applies only to
- outright lifetime gifts by one individual to another
- by actual transfers of value IHTA84/S20 (3).
The exemption does not apply to
- transfers into or out of settlement ( IHTM16000), except that we apply it to an absolute gift in trust for a minor
- the deemed PETs ( IHTM04064) under IHTA84/S102 (4) and FA86/S103 (5).
- apportionments made to persons under IHTA84/S94 (transfers by close companies ( IHTM14851)).
A gift exempted under s.20 cannot be taxed as a GWR (
IHTM04071).
The £250 exemption is applied to the value transferred
before any grossing up (
IHTM14593). Apply the exemption
separately to each donee. It does not matter how many different
donees there are, provided each donee is given no more than
£250 in the same tax year.
If the gifts to any one donee in the same tax year exceed
£250, the s.20 exemption is wholly lost in relation to that
donee.
Unlike the annual exemption (
IHTM14141)
- the £250 exemption does not partly exempt a larger gift, and
- it cannot be carried forward to the following year.
