HMRC tax rule means 'immediate exemption' for UK families

Families could save thousands of pounds in taxRory Poulter09:14, 17 Aug 2026Millions of families could be missing a little-known tax loophole that allows them to hand money to children and grandchildren without it being swallowed up by the HMRC.‌Seven in ten adults have never heard of the exemption, research has found. The warning comes from Which? Money, which has highlighted how regular gifts made from surplus income can potentially be immediately exempt from inheritance tax.‌Known as 'normal expenditure out of income', the exemption means some regular gifts do not have to wait seven years before becoming free of inheritance tax. But there are strict rules – and families need to make sure they can prove they qualify.‌How the loophole worksMany people know about the £3,000 annual gifting