Are gifts in a Will taxable?

Answer

Gifts given in a Will after your death do not count as “gifts” per say, but rather they form part of your estate. Everything that you own of monetary value is known as your estate when you die. A gift could include anything from property to savings or jewellery. 

However, anything that you leave in your Will to family and friends including property, money and possessions may be liable for inheritance tax depending on its value. 

Gifts given less than 7 years before your death may also be taxed even if they are not listed in your Will. This depends on the value of the gift, when it was given, and to whom it is given.

There is a 7-year rule in inheritance tax which means that when you give a “gift” to someone, you don’t have to pay tax on that gift if you live for another 7 years after giving it (unless the gift is part of a trust).

You do not have to pay inheritance tax on gifts you give to a spouse or civil partner as long as they are a permanent UK resident and legally in a civil partnership or marriage with you. In addition, inheritance tax does not apply to donations made to charities or political parties.