IHTM14141 | Lifetime transfers: annual exemption: summary

From HM Revenue & Customs · Inheritance Tax Manual

A person’s lifetime transfers are exempt up to a total of £3,000 in an income tax year - 6 April to 5 April the following year.

The exemption applies to

  • lifetime transfers by individuals ()

  • the lifetime termination of an interest in possession () in settled property, and

  • apportionments made to persons under (transfers by close companies). ()

The exemption does not apply to the deemed potentially exempt transfer (PET) under and

If a transfer of value ()) is more than the amount of the available exemption:

  • it is an exempt transfer () up to the amount of the available exemption ()

  • the excess is the chargeable amount of the PET () or immediately chargeable transfer ().