As wedding season gets closer, guests are being reminded by the Institute of Chartered Accountants in England and Wales (ICAEW) of the tax relief availabilty if they decide to give a gift to a married couple. However, gifts to married couples or civil partners are not considered for inheritance tax (IHT), as long as the couple have a UK residence.
It’s important to note that the tax relief which applies on wedding gifts depends on the relationship between the person giving the gift and the recipient.
This is what applies for wedding gifts:
- Both parent can give up to £5,000 tax free
- Grandparents are allowed up to £2,500 each
- Relatives and friends of the couple – up to £1,000
This applies if all gifts are made on or before the date of the wedding ceremony.
According to Anita Monteith, technical tax Manager at ICAEW, she said:
“With more and more couples living together before marriage, it is becoming increasingly common for newlyweds to request gifts of cash rather than more traditional gifts such as a kettle or toaster for their new home.
“Whatever the gift, all or part of it will be exempt from IHT provided the gift is made on or shortly before the date of the wedding or civil partnership ceremony.”