The ICAEW advice to newlyweds about gifts exempt from IHT — and how your IHT allowance applies
For newlyweds, understanding how the IHT allowance works can make a huge difference when accepting wedding gifts.
With careful planning, cash gifts given to a couple can sometimes avoid inheritance tax altogether — preserving the value for your future together.
That’s why the advice from Institute of Chartered Accountants in England & Wales (ICAEW) is especially relevant when looking at tax-efficient gift giving.
How IHT allowance works in 2025/26
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The standard IHT nil-rate band (NRB) remains £325,000 per individual.
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If you leave your home to a direct descendant (child, grandchild, or certain step/adopted/foster children), the additional residence nil-rate band (RNRB) may apply. For 2025/26 the RNRB is £175,000 per person, meaning a potential combined IHT allowance of £500,000 for individuals.
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For married couples or civil partners, any unused IHT allowance (NRB and RNRB) from the first partner to die can transfer to the survivor — potentially allowing up to £1 million free of IHT on the second death (assuming all conditions are met).
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It’s important to note that the IHT thresholds have been frozen for many years and remain frozen for 2025/26, and are expected to stay frozen until at least 2030.
It’s therefore wise to plan wedding gifts carefully, especially if you expect to build an estate that may one day face IHT.
Why now is a crucial time to consider IHT allowance and estate planning
Given that thresholds remain frozen, many estates that might once have been safe from IHT are now creeping over the threshold simply due to inflation, property appreciation or general wealth accumulation.
Moreover, changes announced in the recent budgets mean the IHT landscape is shifting in other respects too:
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The UK has moved to a residence-based system for IHT (from 6 April 2025), which may bring worldwide assets of long-term UK residents into the IHT net after a certain residency period.
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Some reliefs for business or agricultural properties are being revised from 2026 — meaning families with farms or businesses need to review their plans carefully.
These developments make it more important than ever to use your IHT allowance effectively — and to plan ahead if you expect significant assets or wish to pass on property or business interests.
How Trueman Brown can help you make the most of your IHT allowance
At Trueman Brown, as experienced accountants and tax advisers, we’re here to help you navigate the complexities of IHT allowance, gifting rules and estate planning — especially if you’re newly married or building assets.
Whether you want to:
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Understand how your IHT allowance applies to your estate (including NRB and RNRB)
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Structure gifts (like wedding or lifetime gifts) in a tax-efficient manner
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Plan succession for property, business or investments under the new 2025/26 rules
… we can guide you every step of the way.
If you’d like to discuss your situation, please contact us at mark@truemanbrown.co.uk or call 01708 397262.
We’re always ready to help you secure your financial future.
FAQ — Frequently Asked Questions
Q: What is the current standard IHT allowance for an individual?
A: The standard IHT allowance (nil-rate band) for 2025/26 is £325,000 — meaning assets up to this value are generally free from inheritance tax.
Q: Can I increase this allowance by leaving my home to my children?
A: Yes. If you leave your main home to your direct descendants (children, grandchildren, including adopted, foster or step-children), you may also qualify for the residence nil-rate band (RNRB) of £175,000 — potentially raising your IHT-free threshold to £500,000.
Q: What about married couples — does the allowance double?
A: For married couples or civil partners, any unused IHT allowance from the first to die can transfer to the surviving partner. This means the combined allowance on second death can be as high as £1 million (assuming full use of NRB and RNRB).
Q: How do wedding gifts work with IHT allowance?
A: Wedding gifts can be exempt from IHT if they meet certain conditions (e.g., timed for the wedding, given to a UK-resident couple, and within ICAEW’s recommended amounts depending on the giver’s relationship). This helps reduce the size of the estate and complements your IHT allowance.
Q: Are there recent changes that affect IHT planning I should know about (2025)?
A: Yes. From April 2025 the UK moved to a residence-based IHT system, which may bring worldwide assets into the IHT net for long-term residents. Also, some reliefs for business or agricultural property are changing from 2026 — meaning those with such assets must review their estate plans carefully.