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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Lifetime transfers: gifts in consideration of marriage or registration of civil partnership: summary

Under IHTA84/S22 a gift will be exempt up to the limits set out below if it was made

  • on or shortly before a marriage or the registration of civil partnership (IHTM11032) takes place
  • to one or both parties to the marriage or civil partnership, and
  • to become fully effective when the marriage or registration of civil partnership takes place.

The limits for the exemption are:

  • £5,000 if the transferor is a parent of one party to the marriage or civil partnership
  • £2,500 where the transferor is either a remoter ancestor than a parent of a party to the marriage or civil partnership, or is in fact one of the parties to the intended marriage or civil partnership
  • £1,000 in respect of any other transferor.

If the value transferred by the gift is more than the amount of the available exemption, it is an exempt transfer up to the amount of the available exemption, and the excess is chargeable.

The exemption can apply to:

  • lifetime transfers by individuals (IHTM04053) and
  • the lifetime termination of an interest in possession (IHTM16061) in settled property.

The exemption does not apply to

  • the deemed potentially exempt transfer (IHTM04064) under FA64/S102 (4) and FA86/S103 (5)
  • apportionments made to persons under IHTA84/S94 (transfers by close companies (IHTM14851)).

The part of the transfer which is exempt under the marriage or civil partnership exemption (IHTM11032) cannot be taxed under the gift with reservation (IHTM04071) rules.