For many people, there comes a point where conversations about money start to shift. Instead of focusing purely on building and protecting assets, people begin thinking more about what that money is actually there for and who they may want it to help.
People are increasingly questioning whether they’d rather start passing some money on earlier, while they’re still here to see the impact, rather than simply leaving larger amounts within an estate later on.
For some, inheritance tax planning forms part of that thinking too. Gifting during lifetime can help reduce the value of an estate for inheritance tax purposes, but in our experience, tax is rarely the whole story.
Usually, the bigger question is much more personal: ‘How do I help the people I care about without compromising my own future security?’
What gifting can actually look like
When people hear the word ‘gifting’, they often imagine one large transfer of money. But in reality, it can look very different depending on somebody’s circumstances, priorities, and stage of life.
For some people, it might mean:
- Helping with a first property purchase
- Contributing towards school or university costs
- Supporting family through a financially demanding stage of life
- Making smaller gifts gradually over time
- Using surplus income to help children or grandchildren more regularly
For others, it may involve gradually passing money down during lifetime as part of a wider inheritance plan, rather than leaving larger amounts within the estate later on.
Often, it’s a combination of both.
Why more families are thinking this way
There’s been a noticeable shift in how people think about inheritance and family support.
Research from Legal & General found that financial support from family is playing an increasingly significant role in helping younger generations, particularly around housing costs and deposits.
At the same time, many people are rethinking what they actually want money to achieve.
For some, there’s growing satisfaction in seeing money make a meaningful difference now -helping somebody buy a home, reduce financial pressure, or create more stability earlier in life -rather than simply becoming an inheritance decades later.
Inheritance tax planning often forms part of that thinking too. Under current HMRC rules, certain gifts can fall outside of the estate if the person making the gift survives for seven years, while some regular gifts made from surplus income may be exempt immediately (HMRC gifting rules).
But for most people, gifting decisions are rarely driven by tax alone.
They’re driven by a combination of practical support, long-term planning, and wanting money to have a meaningful impact across generations.
Why people often hesitate
Even when gifting feels emotionally important or tax-efficient, the decision can still feel uncomfortable. Because while somebody may feel financially secure today, the future still contains unknowns:
- Inflation
- Care costs later in life
- Changes in health
- Investment market movements
- or simply living longer than expected
That’s why the hesitation usually isn’t about generosity. It’s about uncertainty.
The fear is rarely: ‘Can I afford this today?’ It’s ‘What if I give this away now and later discover I needed it more than I realised?’
And once money has been gifted, asking for it back is rarely something people want – or feel able – to do.
So how do you know if you can afford to gift?
In practice, this usually comes down to understanding whether the money you’re considering gifting is genuinely surplus to your own long-term needs.
That means looking beyond current balances and considering questions such as:
- What level of income you may need later in retirement
- How your spending could change over time
- Whether care costs may need to be factored in
- How much flexibility you want to retain
- How resilient the wider financial plan remains after gifting
This is where proper cashflow planning can become extremely valuable, because often the answer isn’t simply ‘Yes, you can afford this’. It’s ‘Yes and here’s the level that still leaves you financially secure under a range of different future scenarios.’
In some cases, that may mean gifting more gradually over time. In others, it may highlight that somebody is actually in a stronger position than they realised. And sometimes, it may show that waiting a little longer would create more certainty and flexibility later on.
Why flexibility still matters
Good gifting planning should leave room for life to evolve. Retirement spending can change, health circumstances can shift and family dynamics may evolve over time.
That doesn’t mean gifting should be avoided But it does mean the level, timing, and structure of gifts should be considered carefully.
For some people, that might mean making use of annual exemptions gradually. For others, it might involve gifting from surplus income or waiting until their own long-term needs have been stress-tested more thoroughly.
In our experience, the aim is rarely to give away as much as possible. It’s to find a level of support that feels meaningful, sustainable, and aligned with the wider family plan.
Porta’s Take
One of the biggest misconceptions around gifting is that it’s only something people should think about once they feel completely financially ‘sorted’.
In reality, very few people ever reach a stage where the future feels totally certain.
There will almost always be reasons to hold back: future spending, markets, inflation, care costs, family changes, tax changes, or simply not knowing exactly what lies ahead.
That’s why these decisions are rarely about finding a perfect number.
More often, they’re about understanding what level of support still allows you to feel comfortable, flexible, and financially secure under a range of different future scenarios.
In our experience, that clarity tends to change the conversation completely.
Because once people understand what they realistically need for themselves long term, gifting decisions often become far less emotionally loaded – and much easier to approach calmly and intentionally.
If you’d like help understanding what that balance could look like in your own situation, we’re always happy to talk it through.
Important information
This article provides general information only and does not constitute personal financial advice. The information is based on our understanding of current regulations, which may change in future. Decisions about your finances should always be made based on your individual circumstances. If you’re unsure about the suitability of any course of action, you should seek regulated financial advice.
The Financial Conduct Authority does not regulate tax planning, estate planning, trusts or wills.
The value of your investments can go down as well as up, so you could get back less than you invested.
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