If a present is made less than seven years before the domicile’s death, it will be treated as inheritance and relatives will have to pay taxes on it. The usual tax rate of 40% will be decreased by 20% starting with the fourth year. If a gift is received more than seven years prior to the domicile’s death, inheritance tax will not be applied.
The British tax law allows UK tax residents to give gifts to their relatives and friends if their annual value does not exceed £3,000. Inheritance tax does not apply to wedding presents, financial support for minor children, elderly parents and former spouses as well as regular donations.