Gifts on Marriage and Inheritance Tax UK: The Wedding Gift Exemption Explained
Wedding and civil partnership gifts can be completely exempt from inheritance tax under a specific exemption in the IHTA 1984. The limits depend on the donor’s relationship to the couple — and the gift must be made before the wedding day. Here is everything you need to know.
Quick summary: the wedding gift IHT exemption limits
- Parent of a party to the marriage: up to £5,000 exempt per parent, per marriage
- Grandparent / remoter ancestor, or one party giving to the other: up to £2,500 exempt
- Any other person: up to £1,000 exempt per donor, per marriage
- Civil partnerships are treated identically to marriages
- The gift must be made before or on the wedding day, and the marriage must take place
The legal basis: IHTA 1984 section 22
Section 22 of the Inheritance Tax Act 1984 provides that a gift “in consideration of marriage” is exempt from IHT up to the relevant limit. This exemption has existed in various forms since the early history of capital transfer tax and was preserved when IHT replaced CTT in 1986. It reflects the longstanding legal tradition of wedding gifts as a distinct category of transfer.
The key phrase is “in consideration of marriage”. This means the gift must be:
- Made as a gift that is conditional on (or made because of) the marriage taking place
- Made on or before the wedding day — gifts made after the ceremony are not “in consideration of” the marriage
- Genuine — the donor must intend to make a gift, not a loan or conditional payment
- Either outright to one or both parties, or settled in trust for the parties, their children, or both
The Civil Partnership Act 2004 extended identical treatment to civil partnerships. There is no distinction in the IHT rules between different types of marriage or civil partnership.
The exemption limits in detail
| Donor’s relationship to a party | Exempt limit per marriage | Notes |
|---|---|---|
| Parent of a party to the marriage | £5,000 | Each parent can give £5,000 independently — so two parents can give £10,000 in total |
| Grandparent or remoter ancestor of a party | £2,500 | Per grandparent. All four grandparents could each give £2,500 (£10,000 total) |
| One party to the marriage giving to the other | £2,500 | Gifts between the couple themselves; rarely needed given the spousal exemption |
| Any other person (e.g. sibling, friend, uncle, aunt) | £1,000 | Per donor, per marriage. Applies to step-parents, siblings, friends, employers, etc. |
Note: these limits are per marriage, not per tax year. A donor who gives at two different weddings in the same tax year can use the exemption at both — the limits are separate for each marriage.
Combining the wedding gift exemption with other IHT exemptions
The wedding gift exemption is separate from other IHT exemptions and can usually be combined with them in the same year:
Annual exemption (£3,000 per year)
A parent can give £5,000 as a wedding gift and use their £3,000 annual exemption on top — total £8,000 tax-free in the same year. The annual exemption can also be carried forward by one year, potentially allowing £11,000 total (£5,000 + £3,000 current year + £3,000 carried forward). Both parents could therefore give £22,000 combined in a single year.
Normal expenditure out of income
If the wedding gift is made out of surplus income (as part of a regular pattern of gifts) and all the conditions for the normal expenditure exemption are met, this can apply in addition to the wedding gift exemption. Documenting the gift properly is essential — keep records of income, expenditure, and the intent for regular gifts.
Small gifts exemption (£250 per person)
The small gifts exemption cannot be used to top up a wedding gift to the same recipient in the same tax year. If you give £5,000 as a wedding gift to your child, you cannot also claim a further £250 small gift exemption on a birthday present to the same person that year.
What happens if the marriage does not go ahead?
If a gift is made in contemplation of a marriage that is subsequently called off, the s.22 exemption does not apply — because there is no marriage for the gift to be “in consideration of”. The gift must then be treated under the normal IHT rules:
- If the gift was an outright transfer, it falls back to be tested as a potentially exempt transfer (PET) — IHT will be due if the donor dies within 7 years.
- If the annual exemption or other exemptions cover the full amount, those can still be applied to the gift.
- There is no retrospective reclaim of the exemption once a wedding gift has been made and the marriage has taken place — subsequent divorce does not affect the exemption.
Practically, most donors make the physical transfer of money on or just before the wedding day to avoid any uncertainty. If a cheque is given before the wedding, it should be clearly conditional on the marriage taking place.
Step-parents and adoptive parents
The s.22 exemption uses the term “parent” without definition in the statute. HMRC’s published guidance confirms that step-parents and adoptive parents are treated as parents for this purpose and can give the higher £5,000 exemption. The same treatment applies to step-grandparents and adoptive grandparents. Where there is any doubt about the relationship, keep evidence of the family connection.
Recording the gift for IHT purposes
Even though the wedding gift is exempt from IHT, it should still be recorded — particularly if the donor’s estate is likely to exceed the nil-rate band at death. The reasons are:
- HMRC may query it: if the estate accounts show a large gift in the 7 years before death, HMRC may ask for an explanation. Documentation confirming it was a qualifying wedding gift avoids any dispute.
- The 7-year rule does not apply to exempt gifts: once the wedding gift is confirmed as exempt under s.22, it does not count towards the cumulative 7-year total for PET purposes. There is no need to survive 7 years after a qualifying wedding gift.
- Amounts above the exemption: if the gift exceeds the s.22 limit, the excess is a PET (unless it falls within another exemption such as the annual exemption). The excess should be reported if the donor dies within 7 years.
Frequently asked questions
How much can I give as a wedding gift without inheritance tax?
The amount depends on your relationship to the person getting married. Under section 22 of the Inheritance Tax Act 1984, the following gifts in consideration of marriage or civil partnership are completely exempt from IHT: (1) A parent of a party to the marriage can give up to £5,000. (2) A grandparent or remoter ancestor of a party, or one party to the marriage giving a gift to the other, can give up to £2,500. (3) Any other person can give up to £1,000. These limits apply per donor per marriage — so both parents of a bride can each give £5,000 (£10,000 in total) to the couple. The limits are not per recipient; if a grandparent gives £2,500 to the bride, that is the full exemption for that grandparent for that marriage regardless of how many grandchildren are getting married at the same time.
Does the wedding gift exemption apply to civil partnerships?
Yes — gifts made in consideration of a civil partnership are treated exactly the same as gifts in consideration of marriage under IHTA 1984 s.22, as amended by the Civil Partnership Act 2004. The same limits apply: £5,000 for a parent of a civil partner, £2,500 for a grandparent or between the parties, £1,000 for any other person. Gifts to same-sex couples entering civil partnerships or marriages are fully covered. There is no distinction in the IHT rules between heterosexual and same-sex marriages or civil partnerships.
Can I combine the wedding gift exemption with other IHT exemptions?
Yes — the wedding gift exemption can be used in addition to other IHT exemptions in the same tax year. The most useful combinations are: (1) Annual exemption (£3,000 per year per donor): the annual exemption is entirely separate from the wedding gift exemption. A parent could give £5,000 as a wedding gift plus £3,000 from their annual exemption in the same year — total £8,000 entirely IHT-exempt. (2) Small gifts exemption (£250 per person per year): the small gifts exemption cannot be used to top up another exempt gift to the same recipient in the same tax year. If you give £5,000 as a wedding gift, you cannot also claim £250 small gift exemption on a further gift to the same person that year. (3) Normal expenditure out of income: if the gift is made from regular income and meets all the conditions, the normal expenditure exemption can apply in addition to the wedding gift exemption.
Does the gift have to be made before the wedding?
The gift must be made 'in consideration of' the marriage or civil partnership, which in practice means it must be conditional on the marriage taking place. HMRC and the courts have interpreted this as requiring that the gift be made before or on the day of the marriage. A gift made after the wedding is not 'in consideration of' the marriage — it is simply a gift, potentially subject to the 7-year rule as a potentially exempt transfer. There is an exception: if the gift is made before the wedding but the wedding is then called off, the exemption does not apply (the gift falls back to be tested under the normal rules). Practically, parents sometimes give a cheque before the wedding with a condition that it be cashed only after the ceremony — that is treated as conditional on the marriage taking place and the exemption applies once the marriage occurs.
What forms of gift qualify for the wedding gift exemption?
The gift must be an outright gift of cash or assets, or a settlement into trust. Under s.22, gifts into trust also qualify if the trust is for the benefit of the parties to the marriage, their issue, or both. Gifts into a settlement solely for third parties do not qualify. In practice, most wedding gifts are outright cash transfers. Note that the gift must be a genuine gift of beneficial ownership — a loan or an agreement to write off a debt on the wedding day is not a gift 'in consideration of marriage' unless it genuinely transfers value without conditions of repayment.
What happens to the wedding gift exemption if the marriage fails later?
If the gift qualifies for the s.22 exemption at the time it is made — that is, it is made in consideration of the marriage, before the wedding day, and the marriage takes place — then the exemption is permanent. A subsequent divorce does not affect the IHT treatment of the original wedding gift. The gift has already left the donor's estate, and no IHT arises on it. The 7-year clock does not apply to an exempt gift, so there are no survival requirements for the donor after making the wedding gift.
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