A wedding day is traditionally a very happy (if not slightly stressful) day and it's not just because of the inheritance tax saving possibilities! But they are what we will focus on for now.

If Stan's daughter were to get married he could make a gift of up to £5,000 in consideration of that marriage inheritance tax free. This falls within the exemptions of gifts in connection with marriage and civil partnership. The general allowance are:

Parent to either of the parties involved £5,000

Remoter ancestor (say for example a grandparent) £2,500

One of the parties themselves £2,500

Anyone £1,000

This allowance is for each marriage or civil partnership so if Stan had more children and they were all married in the same year each could receive the gift. Also each parent can make the gift so married couples could reduce the value in their combined estate by £10,000 per child.

If Stan were to make use of this allowance what impact would it have on his inheritance tax liability? Again we will assume Stan has taken all the steps in previous articles

Total estate - £1,254,000**

Less Nil rate band £325,000

Less residence nil rate band £175,000

£754,000

IHT at 40% £301,600

Making use of this allowance has reduced Stan's potential IHT liability by a further £2,000.

To date Stan has reduced his future IHT liability by £74,400.

** £1,265,000 less £6,000 gifted under the annual allowance and £5,000 gifted in connection with a wedding