These include:

• Gifts to someone getting married up to £5,000 if you are a parent, £2,500 if you are a grandparent, or £1,000 for anyone else.
• Maintenance payments to ex-wives or ex-husbands
• Small gifts up to a maximum of £250 per person in a tax year
• There is an annual exemption of £3,000 each tax year. If you give more than £3,000 the amount counts as a PET.
• Gifts to spouses
• Gifts to charities, national institutions such as museums and political parties.

Giving to charity

There are two ways of giving to charity tax effectively.

You can give through the payroll if your employer runs a payroll giving scheme. You ask your employer to deduct a set amount from your pay packet, which is sent on to charities of your choice. You get tax relief at your highest rate.

You can increase the amount you give to charity by using Gift Aid if the charity you give to is registered with the Inland Revenue. The charity can reclaim basic-rate tax from the Revenue on any gift you make. If you are a higher-rate taxpayer you can claim higher-rate relief through your tax return or by asking your tax office to change your PAYE code.

The charity you are giving to will usually have a Gift Aid declaration form for you to fill in.