Wedding Gifts and Inheritance Tax

A grandchild's wedding is a perfect occasion to give — and the UK has a specific inheritance-tax exemption just for wedding gifts. Used alongside your other allowances, it lets you give a meaningful sum completely free of inheritance tax. Here is how to get it right.

The grandparent wedding-gift exemption

There is a dedicated inheritance-tax exemption for gifts made in consideration of a marriage or civil partnership (all figures illustrative and approximate, sourced as of June 2026, per GOV.UK and HMRC). The amount depends on your relationship to the couple:

• £5,000 if you are the parent of one of the couple.
• £2,500 if you are a grandparent (or great-grandparent).
• £1,000 for anyone else.

So as a grandparent you can give up to £2,500 to a marrying grandchild with no inheritance-tax implications at all — and your spouse can do the same, making up to £5,000 between a couple. A good set of financial planning tools helps you see how this fits alongside your other gifts.

Combining it with the annual exemption

The wedding-gift exemption sits on top of your other allowances, which is what makes it powerful. In the same tax year you can give a marrying grandchild:

• Up to £2,500 as a wedding gift, plus
• Your £3,000 annual exemption (and a carried-forward £3,000 from the previous year if unused).

Stack those and a single grandparent could pass £5,500 — or £8,500 using last year's carried-forward allowance too — entirely free of inheritance tax, with a couple able to give twice that. What you cannot do is double up the small-gifts £250 exemption with these allowances for the same person. For how the wider allowances work, see our article on gifting money to grandchildren.

Timing: the gift must come before the day

The single most common mistake is timing. To qualify for the wedding-gift exemption, the gift must be made before the wedding or civil-partnership ceremony, and the ceremony must actually go ahead. A cheque handed over at the reception, or a transfer made the week after, does not qualify — it would instead be treated as an ordinary gift and rely on your other exemptions or the seven-year rule.

Make the gift in good time, and keep a short record of the amount, the date, and the wedding it relates to. That note is exactly what an executor needs later to show the gift was exempt.

Giving more than the exemption

Many grandparents want to give more than £2,500 toward a wedding or a first home. Anything above the combined exemptions is a Potentially Exempt Transfer (PET): it leaves your estate completely if you live seven more years. Within seven years it counts back into your estate, although taper relief can reduce the tax where your total gifts in that period exceed the £325,000 nil-rate band.

For most family-sized gifts that sit within the nil-rate band there is no tax to taper, so the practical rule is simple: give early and keep records. Our companion piece on inheritance tax explained for grandparents walks through the thresholds, and you can model your IHT position before committing to a large gift.

Where this fits in the bigger picture

The wedding-gift exemption is one of several occasion-based allowances grandparents can use. For the complete toolkit — gifting, the nil-rate bands, wills and the April 2027 pension change — read our grandparents' guide to gifting and legacy. If your estate is near the thresholds, a qualified financial adviser can help you plan.

This is general information, not personal financial, tax or legal advice. Every figure is illustrative and approximate, sourced as of June 2026, and the rules change — speak to a qualified financial adviser, and a solicitor for wills and trusts, before you act.