Two wedding rings overlapping on a table next to a rose and other flowers

Parents could gift newlyweds £40,000 inheritance tax-free if allowance had kept pace with inflation

11 August, 2026

Newlywed couples are missing out on more than £35,000 in tax-free gifts due to an allowance that has been unchanged in 51 years, says the Association of Taxation Technicians.

August is usually the busiest month for weddings, with more than 30,000 couples getting married, and parents are able to gift the happy couple up to £5,000 without needing to worry about a possible inheritance tax charge. However, this threshold has not been updated since 1975. If it had kept pace with inflation since then, it would now be worth just over £40,000.

The grandparent of the bride or groom can also gift up to £2,500 inheritance tax free, while for anyone else the limit is £1,000. These would be worth £20,000 and £8,000 respectively today if they had increased in line with inflation.

The ATT says the failure to adjust these allowances in the last half-century have eroded their value. A review of inheritance was carried out by the Office of Tax Simplification (OTS) in 2019, which suggested the allowances on marriages and civil partnerships should be replaced with a single, increased gift allowance.

Jon Stride, chair of the ATT’s Technical Steering Group. said:

"Golden anniversaries are normally a cause for celebration, but not when it comes to this frozen allowance.

“Parents, grandparents and friends want to give their loved ones the best start in married life, but the failure to uprate this allowance in the last 50 years means fairly modest wedding gifts could incur inheritance tax bills.

“Alongside other gifting allowances, they’re in dire need of reassessment to ensure they are still fair and relevant in the 21st century. The OTS previously called for reform to the wedding gift allowance and we would also like to see the threshold raised.

“This would reduce complexity and allow HMRC to focus its resources on more significant inheritance tax issues, rather than relatively insignificant family gifts.

"Wedding gifts are traditionally something old, something new, something borrowed and something blue. This old threshold is certainly leaving some newlyweds feeling blue."

Notes for editors:

  1. Outdated tax reliefs and allowances - the ATT's worst offenders.
  2. Bank of England inflation calculator.
  3. Office of Tax Simplification: Inheritance Tax Review.