What you need to know about the annual £3,000 exemption for Inheritance Tax (IHT) purposes.
- Transfers are exempt from IHT up to a total of £3,000 in each tax year.
- For gifts on different days in the same tax year, the annual exemption is applied in date order.
- For multiple gifts on the same day the exemption is apportioned between them.
- Any part of the annual exemption which is not used in the tax year is carried forward into the following tax year.
- On 19 January 2018, Philip Hammond wrote to the Office of Tax Simplification requesting a review of the IHT regime. It is recommending changes to lifetime gift exemptions.