Definition
The Wedding Gifts Exemption allows you to give tax-free gifts to someone getting married or entering a civil partnership, with the amount you can give depending on your relationship to the couple.
This exemption provides a valuable opportunity to make substantial gifts that are immediately and permanently exempt from inheritance tax—but only if you give them before the ceremony takes place.
What Does Wedding Gifts Exemption Mean?
The wedding gifts exemption is a specific inheritance tax relief under Section 22 of the Inheritance Tax Act 1984, extended to civil partnerships by the Tax and Civil Partnership Regulations 2005. The exemption amounts are tier-based according to your relationship: parents can give £5,000, grandparents and remoter ancestors £2,500, and anyone else £1,000. Each person gets their own individual allowance, meaning both parents can each give £5,000, totaling £10,000 to their child. Gifts can include cash, property, shares, or other assets.
The critical timing rule is absolute: you must make the gift before the wedding or civil partnership ceremony takes place, or on the day itself. Gifts made after the ceremony don't qualify for this exemption unless they fulfill a binding legal promise made before the wedding. The marriage or civil partnership must actually take place for the exemption to apply—if the engagement is broken off, the gift doesn't qualify. Unlike most lifetime gifts, wedding gifts are completely exempt from inheritance tax even if you die within seven years. This makes them far more valuable than standard gifts, which only become fully exempt after the seven-year period passes.
You can combine the wedding exemption with your annual £3,000 exemption to give larger tax-free amounts. For example, Sarah's parents each give her £5,000 as a wedding gift in May, before her July wedding. They also each use their £3,000 annual exemption. Sarah receives £16,000 total from her parents, completely tax-free and immediately outside their estates for inheritance tax purposes. However, you cannot combine the wedding exemption with the small gifts £250 exemption for the same person.
Parents can also give to both people in the couple separately. A parent can give £5,000 to their own child and £1,000 to their child's spouse-to-be, combining these with annual exemptions for even larger amounts. The maximum tax-free gift from both parents combining all exemptions could reach £24,000 to the couple. Any amount over the exemption limits becomes a Potentially Exempt Transfer (PET), subject to the seven-year rule. Keep clear records of wedding gifts—executors will need documentation showing the date, amount, and purpose of the gift for HMRC if required.
Common Questions
"Can I give my daughter money for her wedding without it counting towards inheritance tax?" Yes, you can give your daughter up to £5,000 as a wedding gift completely free from inheritance tax, as long as you make the gift before her wedding takes place. You can also combine this with your £3,000 annual exemption to give up to £8,000 tax-free in the same year. Both parents can do this, meaning together you could give up to £16,000.
"My grandson is getting married next year—how much can I give him for his wedding without tax implications?" As a grandparent, you can give your grandson up to £2,500 as a wedding gift free from inheritance tax. This applies whether it's a marriage or civil partnership. Unlike most gifts, this exemption doesn't depend on the seven-year rule—it's immediately and permanently exempt from inheritance tax as long as you give it before the wedding ceremony.
"I gave my son £10,000 after his wedding—does the wedding gift exemption still apply?" Unfortunately, the wedding gift exemption requires gifts to be made before the marriage ceremony, not after. Your £10,000 gift would be treated as a regular lifetime gift (Potentially Exempt Transfer). However, you can use your annual £3,000 exemption, and potentially the previous year's if unused, to reduce the taxable amount. The remaining amount would only be subject to inheritance tax if you pass away within seven years.
Common Misconceptions
Myth: I can give my daughter a wedding gift at any time around her marriage—even if it's a few months after the ceremony—and it will still be tax-free.
Reality: The wedding gifts exemption only applies to gifts made before the marriage or civil partnership ceremony takes place, or on the day itself. Gifts made after the ceremony don't qualify for this exemption unless they fulfill a binding legal promise made before the wedding. Timing is absolutely critical—getting this wrong means losing the exemption entirely.
Myth: The wedding gift exemption amounts (£5,000, £2,500, £1,000) are totals for everyone giving to the couple, so we need to coordinate with other family members.
Reality: Each individual donor gets their own separate wedding gift exemption based on their relationship to the person getting married. Both parents can each give £5,000 (total £10,000), all four grandparents can each give £2,500 (total £10,000), and friends can each give £1,000—all completely tax-free. The limits apply per donor, not per couple receiving gifts.
Related Terms
Understanding Wedding Gifts Exemption connects to these related concepts:
- Inheritance Tax (IHT): Wedding gifts exemption is a specific relief from IHT that provides immediate, permanent exemption.
- Annual Exemption: Can be combined with wedding gifts exemption to give larger tax-free amounts in the same year.
- Small Gifts Exemption: Cannot be combined with wedding gifts exemption for the same person, unlike the annual exemption.
- Potentially Exempt Transfer (PET): Gifts exceeding wedding exemption limits become PETs, subject to the seven-year rule.
- Lifetime Gift: Wedding gifts are a special category of lifetime gift with more favorable immediate exemption.
Related Articles
- Understanding Inheritance Tax Exemptions and Allowances: Explore how wedding gifts exemption fits within the broader landscape of IHT planning strategies.
- Tax-Efficient Ways to Give Money to Family: Learn how to maximize tax-free gifts by combining wedding exemptions with other allowances.
- Estate Planning for Parents: Helping Adult Children: Discover strategic opportunities for wealth transfer around major life milestones like weddings.
Need Help with Your Will?
Understanding wedding gifts exemption is just one part of comprehensive estate planning. If you're planning how to distribute your assets tax-efficiently while helping family members during important life events, getting your will right is essential.
Create your will with confidence using WUHLD's guided platform. For just £99.99, you'll get your complete, legally binding will plus three expert guides. Preview your will free before paying anything—no credit card required.
Legal Disclaimer: This glossary entry provides general information about the Wedding Gifts Exemption and does not constitute legal or tax advice. Inheritance tax rules can be complex, and individual circumstances vary. For advice specific to your situation, consult a qualified solicitor or tax adviser.