£20,000 Gift Allowance In 2024: What It Means For Property And Family In The UK

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The UK government has announced an increase in the gift allowance from £3,000 to £20,000 starting in 2024. This change will have significant implications for property transactions and financial planning for families across the country. Here is an in-depth look at what the new £20,000 gift allowance could mean.

Overview of the Gift Allowance Increase

  • Currently, the gift allowance in the UK is £3,000 per tax year. This means you can give away up to £3,000 worth of gifts each year without having to pay inheritance tax.
  • Starting in 2024, the gift allowance will increase to £20,000 per tax year. Gifts up to this amount will be exempt from inheritance tax.
  • The allowance applies per individual. Therefore, a married couple could potentially gift up to £40,000 between them every tax year without incurring inheritance tax.
  • Any unused portion of the £20,000 allowance can be carried forward to the following year. However, the total exemption is capped at £200,000 over a rolling 10-year period.
  • The gift allowance is in addition to the existing annual inheritance tax exemptions for gifts on marriage or civil partnership, gifts to charities, and small gifts up to £250 per recipient per tax year.
  • Inheritance tax is charged at 40% on the value of the estate above the nil-rate band (currently £325,000 for an individual, £650,000 for a married couple).

Implications for Property Transactions

The six-fold increase in the gift allowance could have significant implications for property transactions between family members. Here are some of the key opportunities this presents:

Deposits for First-Time Buyers

  • Parents could potentially gift £20,000 tax-free to adult children every tax year to help with deposit savings for a first home.
  • Over 5 years, £100,000 could be gifted. This could cover the entire deposit on a modest first property in many areas of the UK.
  • For example, can I give my son £20,000 in 2024 to put towards a deposit on his first home? With the new allowance, this would be entirely exempt from inheritance tax.

Downsizing and Equity Release

  • Older homeowners looking to downsize could gift some of the proceeds from the sale to family members. Up to £20,000 per recipient could be gifted each tax year without inheritance tax implications.
  • Equity release could help unlock cash from the home to fund these gifts. However, professional advice is essential to ensure this is done appropriately.

Transferring Ownership

  • The increased allowance provides more flexibility to transfer ownership of property between family members.
  • For example, parents could gift a share of their home to adult children to gradually transition ownership over time. Up to £20,000 of value could be gifted each tax year.
  • Transferring ownership of investment properties or second homes may also be more feasible due to the higher allowance.

Inheritance Tax Planning

  • Larger tax-free gifts can be made each year to reduce the value of estates for inheritance tax purposes.
  • Over the £325,000 nil-rate band, inheritance tax at 40% applies. The increased gift allowance gives families more opportunity to minimise this tax.
  • Those with wealth above the nil-rate band should still take professional advice to develop the most tax-efficient plans.

Impact on Financial Provision for Family

As well as property assets, the higher allowance also enables tax-efficient gifting of financial wealth like cash and investments. This can help families financially support each other during their lifetimes.

Supporting Retirement

  • Tax-free gifts of up to £20,000 per year could be made to adult children reaching retirement age to supplement pensions.
  • This could help with expenses in retirement or free up income for the retiree’s use.

Education Costs

  • School and university fees have risen substantially in the UK. The increased gift allowance provides more scope to assist with these costs.
  • £20,000 could cover a significant portion of private secondary or higher education fees per child each tax year.

Raising Deposits

  • In addition to property deposits, gifted funds could help adult children raise deposits for cars, training courses, or business ventures.
  • Recipients may benefit from family financial help without needing commercial loans.

Living Costs

  • For adult children who are renting, self-employed, or saving for major goals, gifts up to £20,000 per year could help supplement living costs tax-efficiently.
  • This can provide family support while reducing dependence on benefits or consumer debt.

Marriage Gifts

  • Parents traditionally support children’s weddings and provide an initial financial gift to the couple. The increased allowance enables more significant tax-free gifts.
  • For example, each parent could contribute £20,000 towards the wedding or married life.

Charitable Causes

  • The higher allowance also creates scope for passing on charitable values through tax-free family gifts to good causes.
  • Family members could nominate worthy charities to receive portions of the £20,000 annual allowance.

Opportunities and Risks

If you have the question “Can I give my son 20000 in the UK in 2024?”, some risks need to be considered

  • Care is needed to avoid falling foul of inheritance tax rules. Professional advice should be sought if gifting large values.
  • Supporting family is admirable, but parents should balance this against their retirement provision.
  • Transparency between family members is vital – gifting should not become an ‘obligation’ or cause tensions.
  • For gifts of property or land, legal fees and taxes apply which also need factoring in.
  • Those receiving gifts beyond their usual income may become ineligible for certain benefits or tax allowances.

Planning to Use the Increased Allowance

Individuals wishing to optimise the use of the £20,000 annual gift allowance from 2024 should take these steps:

  • Consider your family’s financial priorities – where could gifts provide the most value? Education costs or property deposits for children? Retirement help for parents?
  • Review your property and financial assets. Is liquidity available to sustain ongoing gifts at this higher level?
  • Take professional financial and legal advice to ensure tax rules are complied with and gifts are properly structured.
  • Discuss intentions openly as a family to avoid misunderstandings or family issues.
  • Check entitlement implications for gift recipients about benefits, tax allowances, insurance etc.
  • Keep thorough records of all gifts made including amounts, dates and purpose. This is essential for tax compliance.
  • Review your estate plan and wills to account for the lifetime gifts made and keep these up to date.


The upcoming increase in the UK gift allowance enables tax-efficient gifting on a much more significant scale between family members. This provides opportunities to offer financial support where it is most valuable – whether for property purchases, education, retirement or other purposes. However, forethought and care are needed to ensure gifting is done appropriately and does not cause negative family issues or unintended consequences. As with any substantial financial planning activity, professional advice is advisable before embarking on a structured family gifting plan.

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