Mark McLaughlin considers that the inheritance tax annual exemption should not be overlooked or underestimated.
The inheritance tax (IHT) annual exemption is often overlooked. This is probably because the exempt amount is a relatively modest £3,000 (for 2025/26). However, as the well-known slogan from the popular supermarket goes, ‘every little helps’!
For example, £3,000 given away in every tax year for seven years can shelter £21,000 from a possible IHT liability of £8,400 on death; for a married couple (or civil partners), the potential IHT saving doubles to £16,800, for very little effort or planning.
Give…give…give!
Any unused annual exemption can be carried forward to the following year, but not beyond (IHTA 1984, s 19). The annual exemption for the later year must be used completely before
