Glossary · UK
What is Wedding Gift Exemption?
An Inheritance Tax exemption allowing gifts made in consideration of a marriage or civil partnership to be immediately outside the estate, up to £5,000 from a parent, £2,500 from a grandparent, or £1,000 from anyone else.
Full Definition
The wedding (or civil partnership) gift exemption allows a gift made "in consideration of marriage" -- meaning given in connection with, and conditional on, a wedding or civil partnership actually taking place -- to fall immediately outside the donor's estate for Inheritance Tax purposes, rather than needing to survive the usual seven years required for an ordinary potentially exempt transfer to fall out of account. The exempt amount depends on the relationship between the donor and the person getting married: a parent of either party to the marriage can gift up to £5,000 exempt, a grandparent or more remote ancestor up to £2,500, one of the couple to the other up to £2,500, and any other person (a friend, aunt, uncle, or unrelated well-wisher) up to £1,000. To qualify, the gift must genuinely be made in consideration of the marriage or civil partnership -- meaning it must be conditional on the wedding taking place and typically made shortly before the event, rather than being a general gift that happens to coincide with a wedding -- and if the marriage does not go ahead, the exemption is lost and the gift is treated as an ordinary transfer for Inheritance Tax purposes (or potentially returned to the donor under the terms on which it was made). Worked example: a father who gives his daughter £5,000 shortly before her wedding uses the full parental exemption, and if her grandmother separately gives £2,500 at the same time, both gifts are entirely exempt from Inheritance Tax immediately, with neither counting against the donor's annual £3,000 gift exemption or requiring the usual seven-year survival period. The wedding gift exemption can be combined with the donor's separate annual exemption (£3,000 a year, potentially £6,000 if the previous year's allowance was unused) and with normal expenditure out of income if the gift also happens to meet those separate conditions, allowing a well-organised family to pass a meaningful sum to a newly married couple entirely free of Inheritance Tax risk in a single tax year, provided each exemption's own conditions are independently satisfied and not simply assumed to stack automatically.