Inheritance tax gift reforms urged as taxpayers miss out on £1,000s – rules explained | Personal Finance | Finance

Taxpayers can also use the small gifts exemption, which allows individuals to make unlimited gifts of £250 each year, as long as they are given to different recipients.

The small gift exemption has also been unchanged since 1980 and would be £1,096 if it had increased in line with inflation, according to UHY Hacker Young’s analysis.

The amount saved in IHT through gifting only accounted for 0.6 percent of the £5.3billion which HMRC brought in through IHT last year, which suggests there is much greater scope for the allowance to be used.

Ms Chauhan continued: “Although it may be seen as a relatively small allowance, more individuals should be taking advantage of this tax break.

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