How to Record Lifetime Gifts for Inheritance Tax: What Executors Will Need (2026/27)

This guide is general information, not advice.

This guide is for anyone giving money or assets away during their lifetime: parents helping with a deposit, grandparents paying into a savings account, anyone making regular payments to family. It is about the paperwork, not the tax calculation. For how gifts are taxed if you die within 7 years, see the 7-year gift taper guide.

By the end you will have a gift log in the format HMRC’s own form uses, an income-and-spending record for regular gifts, and a clear place to keep both.

Before you start

GOV.UK puts the reason plainly: “The person who deals with your estate will need to work out what gifts you gave in the 7 years before your death.” It asks you to keep a record of:

• what you gave and who you gave it to
• the value of the gift
• when you gave it

Your executors will copy these details onto Schedule IHT403, so it pays to collect what that form asks for. Have ready:

• bank statements showing each transfer
• valuations for anything that is not cash, such as shares, property or jewellery
• your P60s, pension statements and interest and dividend statements, if you make regular gifts from income
• your will, so the log can be kept with it

Step-by-step

1. Start one log for all gifts. Use the column headings of IHT403 box 7: date of gift; name and relationship of the person, charity or organisation who received it; description of the asset (IHT403 gives “the number of shares in a particular company” and “the address of a house” as examples); type of exemption or relief; value at the date of gift.

2. Name the exemption for each entry. The exemptions that GOV.UK lists are: the £3,000 annual exemption, with any unused amount carried forward one tax year only; small gifts of up to £250 per person per tax year, if no other allowance is used on that person; wedding or civil partnership gifts of up to £5,000 to a child, £2,500 to a grandchild or great-grandchild and £1,000 to anyone else; gifts to a spouse or civil partner; gifts to charities and political parties; and normal expenditure out of income. For a charity, IHT403 asks for its full name, country of establishment and HMRC charities reference, if available.

3. Record sales below value as gifts. GOV.UK says selling something for less than it is worth counts as a gift of the difference. Log the market value and the price paid.

4. Keep an income-and-spending table for regular gifts. For the normal expenditure out of income exemption, HMRC’s manual at IHTM14231 says each gift must form part of your normal expenditure, be made out of income, and leave you enough income to keep your normal standard of living. IHT403 boxes 20 to 22 ask your executors for, in each tax year gifts were made:

   • income by source: salary, pensions, interest (including PEPs and ISAs), investments, rents, the income element of annuities, other; minus Income Tax paid; net income
   • spending: mortgages, insurance, household bills, Council Tax, travelling costs, entertainment, holidays, nursing home fees, other; total
   • surplus income (net income minus spending) and the gifts made

   Fill this in yourself each 5 April. Your executors will find it far harder to rebuild after your death.

5. Write down why the gifts are regular. A note such as “£400 a month to granddaughter’s savings account until she is 18” is evidence of the commitment. HMRC’s manual at IHTM14242 says a reasonable span to show a pattern would normally be three to four years, and that a single gift needs strong evidence it was meant to be the first of a series.

6. Log gifts you still benefit from separately. GOV.UK’s guidance on gifts covers gifts with reservation, such as giving away your home but still living there. IHT403 asks about these on a separate page, for gifts made on or after 18 March 1986. HMRC’s IHT400 notes say there is no 7-year limit and that, if you pay market rent, executors must still report the gift. Keep rent receipts and the tenancy agreement with the log.

7. Log gifts into trusts and insurance premiums. IHT403 asks whether you created a trust, added to one, or paid premiums on a life policy for someone other than yourself or your spouse. Keep the trust deed or policy with the log.

8. Store the log with your will and tell your executors. Update it every tax year.

Deadlines and what happens next

There is no deadline for you. The dates below apply to your executors.

• On IHT400, question 30 asks about lifetime gifts made on or after 18 March 1986; a Yes leads to Schedule IHT403.
• IHT403 tells executors not to report gifts where the total was £3,000 or less in any tax year, small amounts of £250 or less, or gifts to a spouse or civil partner. Your log is the evidence for leaving them out.
• The IHT403 box 7 total goes to IHT400 box 113. Gifts with reservation and pre-owned assets (IHT403 box 17) go to IHT400 box 104.
• Executors do not deduct taper relief on IHT403. The form says HMRC will send separate calculations, including any taper relief, if tax is due on gifts.
• The IHT400 notes say executors need not send bank statements with the form but should be ready to produce evidence of income and spending if HMRC asks.
• If tax is due on a gift, IHT403 says the recipient is liable for it. A year after the death, the executors become jointly liable.
• Inheritance Tax on the estate is due by the end of the sixth month after the death, per GOV.UK.

How long to keep the log. IHT403 box 18 asks about chargeable transfers, such as gifts into most trusts, in the 7 years before the earliest gift being reported. That can reach back further than 7 years from death, so keep those records for longer.

Common mistakes

• Recording cash but not assets. Shares, a car or furniture are gifts too. Record the value at the date of the gift.
• Claiming gifts out of income with no figures. IHTM14250 says HMRC measures income net of Income Tax. Without the yearly table, executors cannot show the gift came from income.
• Relying on old savings. IHTM14250 says HMRC generally treats income as becoming capital after two years, unless there is evidence to the contrary.
• Combining the small gifts exemption with another. GOV.UK says the £250 exemption cannot be used on someone who has had another allowance.
• Forgetting the carried-forward year. Whether last year’s £3,000 was used decides if it can be carried forward, so keep each year’s log.

Worked example

An illustrative 2026/27 log. The exemption limits are GOV.UK’s.

Date	Recipient	Asset	Value	Exemption claimed
20 May 2026	Son	Cash	£3,000	Annual exemption 2026/27
4 July 2026	Daughter, for her wedding	Cash	£5,000	Wedding gift to a child
Monthly from April 2026	Granddaughter	£400 a month into her savings account	£4,800	Normal expenditure out of income
20 December 2026	Three grandsons	Cash, £100 each	£300	Small gifts
10 February 2027	Nephew	1,000 shares in one listed company	£8,000	£3,000 annual exemption carried forward from 2025/26 (unused that year)

The income-and-spending table for the year, using IHT403’s headings: net income after Income Tax of £29,000; spending of £18,000; surplus of £11,000. The £4,800 of monthly gifts sits inside that surplus.

If death came within 7 years, the executors would leave out the grandsons’ gifts of £250 or less (IHT403 does not ask for them). Because the year’s gifts total more than £3,000, the son’s gift still goes on the form. On IHT403 box 7 they would list the son’s gift (£3,000 annual exemption, net nil), the wedding gift (£5,000 exempt, net nil), the monthly gifts (£4,800 exempt, net nil, with the income table completed) and the shares (£8,000 less £3,000, net £5,000). The £5,000 total goes to IHT400 box 113. HMRC then works out any tax, and any taper relief, as described in the 7-year gift taper guide.

Related reading

• IHT 7-year gift taper 2026/27 - exemptions and how tax on gifts is tapered.
• IHT 7-year gift schedule calculator - put your log in and see what might be chargeable.
• How to write a will - the document your gift log should sit with.