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HMRC internal manual

Inheritance Tax Manual

Lifetime transfers: conditions for normal out of income exemption: normal expenditure

The dictionary definition of ‘normal’ includes standard, regular, typical, habitual or usual. For the purpose of this exemption, ‘normal’ means normal for the transferor and not for the average person. In most cases, it will be clear whether or not there is a pattern of giving, but it is not always that simple.

It is possible that a number of gifts made by one person may not qualify. It is also possible for a single gift to qualify if it is or is intended to be the first of a pattern and there is evidence of this. You will need to analyse all the facts in cases of doubt to see if a pattern can be found (IHTM14242).

Factors to take into account in looking at any pattern of gifts include the frequency and amounts, the nature of the gifts, the identity of the donees and the reasons for the gifts (IHTM14243).