Exempted gifts from inheritance gift tax implications are:

1. Wedding or civil ceremony gifts of up to £1,000 per person, £2,500 for a grandchild or great-grandchild and £5,000 for a child.
2. Normal gifts which you give away as a birthday or Christmas gift. However, it is important that you are able to maintain your normal standard of living after making the gift. In order to get benefited from this particular exemption, the gifts need to be made on a regular basis rather than it having a onetime affair. Moreover the gifts need to be made from your true income i.e. your income after tax and not from your savings. These exempt payment include:
   
   
   • Maintenance for your husband, wife, civil partner.
   • Maintenance for your ex-husband, ex-wife or formal civil partner.
   • Maintenance for relatives who depend on you.
   • Maintenance for your children, adopted children or step-children, as long as they are under 18 or in full-time education.
   • Regular gifts for Christmas, birthdays or weddings/civil partnership anniversaries.
   • Premiums on life insurance policies.
3. Any sort of payments to help with another person’s living costs, such as an old relative or a child under 18 years.
4. Gifts to charities and political parties: In order to save tax implications on your gift, you can leave some or your entire estate to a charity. However, you can choose to donate to a charity while you are alive or else you can declare this in your will. If you allocate 10% of your net estate to a charity, then in that case, inheritance tax will be cut down to 36%, instead of 40% on the rest of your estate value.
5. Lifetime gifts for the upbringing of children and other dependants, if any, do not have any tax implications on it. Few other exempts on the gifts are as below:
   
   
   • To the political parties.
   • To the educational institutions such as universities.
   • For national purpose.
   • For public health.

You can use more than one of the above listed exemptions on the same person in the same tax year. For example, you can gift your great - grandchild on her birthday and wedding in the same tax year, without having any tax implication on it. It is very important that you keep precise records of when you gift money and to whom, otherwise inheritance tax could be applicable on the gifts when you die. In case you are gifting large sums of money, for example, a deposit for a child’s home, ensure that you write and sign a dated letter to prove when the gift was given and how much was given.

However, any gift that you make has a 7-year rule applicable to it, which is also called as Benefit of Tapering, which can be stated as: If a person gives away more than £3,000 as gift in a tax year or has utilized any of the gift tax exemptions to save tax on his gifts, and dies within seven years of making that gift, leaving an estate of value more than £325,000, then the gift will have certain tax implications and same is explained in the below tabular format:

In case the person, i.e. the beneficiary, is a connected person, which include family members such as children, parents, grandparents (except cousins) as well as family trusts and business that are under donor and if a property is given away or sold at a cost less than its market value, then any tax applicable on it will be charged on it market value rather than on the value it is being sold, provided that the person who is receiving it is a connected person to the donor.

In case, the property that you are giving away as a gift, has not been your main residence for the entire duration that you have owned it, Capital Gains Tax will be applicable on it, however, if it has always been a buy-to-let property, then tax will be applicable on it for the entire time duration you have owned the property.

Capital gains tax is paid on the increase in the property’s value since it was bought, less expenses such as stamp duty and legal fees and there is an annual capital gains tax allowance of £11,000. Any gain, over and above this limit, will be charged at the rate of 18pc for a basic-rate taxpayer or 28pc for a higher-rate taxpayer.

Stamp duty is applicable on a property only if there is a mortgage attached to it and it is payable by the receiver of the. In case there is a mortgage attached to the property, the recipient has to pay the stamp duty on the balance or the outstanding value of the mortgage. Stamp duty land tax on the property was reformed in the year 2014 and it is more or less calculated like income tax. Rate of stamp duty as per various price band is as below:

For example, if Fred has bought a house worth £275,000. He pays no stamp duty on the first £125,000 and next £125,000 will trigger a 2pc tax charges of £2,500, and the remaining £25,000 will incur 5pc tax worth, which is another £1,250. So, on a property worth £275,000, he gives a total stamp duty bill of £3,750.

In case, you are giving away your rental property to your children who is under 18 years of age, you will be taxed on your rental income even if you are not receiving the rental income.

Property gifts count as a "potentially exempt transfer" under the inheritance tax rules. This means that they can be made inheritance tax-free as long as the giver lives for seven years afterwards. After three years the tax amount falls - by eight percentage points each year from the full rate of 40pc - until the eighth year, after which the property is out of the previous owner's estate for tax purposes. Each person has an inheritance tax allowance of £325,000, so if the entire estate, including the property, is worth less than this, there is no inheritance tax liability anyway. From next year the family home allowance will allow parents to increase their allowance when passing property to direct descendants.This will be worth an extra £100,000 in 2017-18, £125,000 in 2018-19, £150,000 in 2019-20 and finally £175,000 in 2020-21, for estates where a property that was the main or "family home" is being passed to children, foster children, stepchildren or grandchildren.