An outright gift to an individual, which becomes an exempt transfer if the donor lives for seven years after the date of the gift.

If you make a gift during your lifetime, it could be liable to inheritance tax. Some gifts are exempt from inheritance tax, such as gifts to your spouse, and the first £3,000 of other gifts each tax year. Other gifts you make to individuals will be exempt, provided you do not die within 7 years of the gift. Such gifts are potentially exempt transfers, you will not know until 7 years have passed whether they are exempt or not, although you treat them as exempt in the meantime. Inheritance tax may become payable if you do not survive for the full 7 years.

A gift which is not taxable at the date of the gift but may be brought into charge at a later date