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HMRC internal manual

Inheritance Tax Manual

Pre-owned assets: excluded transactions: the disposal condition - annual and small gifts exemption

For the purposes of the disposal conditions relating to land and chattels, the disposal of any property is an excluded transaction in relation to the chargeable person if it was an outright gift to another individual and is, for Inheritance Tax purposes, a transfer of value that is wholly exempt under IHTA84/S19, annual exemption (IHTM14141) or IHTA84/S20 small gifts exemption (IHTM14180), FA04/Sch15/Para 10(1)(e).