Inheritance tax: Gifting to avoid a large bill? Don’t get caught out by the 7 year rule | Personal Finance | Finance

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Parents can also gift £5,000 if any of their children are getting married, £2,500 to a grandchild or great-grandchild on marriage, and £1,000 to another relative or friend.

People can also make regular payments to help with another person’s living costs, known as “normal expenditure out of income” however, this should not affect a person’s own standard of living.

However, the seven year rule can sneak up on people and mean that tax is paid on the gifts they have given.

No tax is due on any gifts you give if you live for seven years after giving them, however if the person dies within the seven years there is a tax to pay.

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