CAPITAL GAINS TAX

What’s the general CGT rule for transactions between an individual and their spouse/civil partner?

Each spouse/civil partner has their own annual exempt amount for CGT. For 2022/23 it’s £12,300. This means each is entitled to make gains from the sale or transfer of assets in that year up to £12,300 without being liable to CGT.

For tax years in which a couple are married and living together throughout, i.e. not permanently separated, or a year in which they permanently separate, a sale or gift of an asset which is within CGT is treated as if it were sold at a price that resulted in neither a capital gain nor a loss. This is called the “no gain no loss” rule. It boils down to the transfer of an asset from one spouse/civil partner to the other as being treated as a sale at the cost of the asset for CGT purposes.

Where you were given an asset or it’s sold to you for less than it’s worth because the seller is connected to you or wanted to give you an advantage, its cost for CGT purposes is its “market value” at transfer. Market value means the amount that an unconnected third party would be willing to pay for it.

Example

In 2008 Hermione inherited a painting which had a probate value of £30,000. In 2020 she married Ron. They plan to move into a larger home in a few years and may want to sell the painting to help fund the purchase. To reduce the potential CGT from the sale of the painting Hermione transfers a 50% share in the painting to Ron as a tenant in common.

The gift is on a no-gain no-loss basis which means for CGT purposes Hermione is deemed to have sold a 50% stake for £15,000 (£30,000 x 50%). Ron is deemed to have paid £15,000 for his share. If the painting is sold for more than £30,000, they will each make a capital gain equal to the difference between half the proceeds less their respective £15,000 cost.

CGT can be reduced by splitting a gain between spouses/civil partners. This is easily achieved by the spouse/civil partner who owns the asset on which there is a gain transferring a share in the asset to the other spouse/civil partner. HMRC can and often will ask for evidence of ownership of an asset. Where there’s been an intra-spouse/civil partner transfer, you must be able to provide evidence, e.g. a deed of gift, a trust deed, stock transfer form, etc.

Does it matter when a transfer between one spouse/civil partner and the other is made?

No, the no-gain no-loss rule applies whether the transfer was made ten years or ten hours before an asset is sold. However, for CGT purposes a sale or transfer of an asset occurs when there is an unconditional agreement for the transaction, e.g. a contract of sale. The completion of the transaction, usually payment for the asset, isn’t relevant.

Example

Jack bought a holiday home in 2008 for £200,000. He’s selling it so that when he marries Rose six months from now they have more cash to buy a home together. In July 2022 he receives an offer of £300,000 for the property, which he accepts. Jack and Rose are due to be married on 1 September 2022. Jack agrees with the purchaser to delay exchange of contracts until after he’s married - they agree on 10 September.

After the wedding celebration is over Jack signs a deed of gift (which he had his solicitor prepare weeks earlier) transferring a 35% share of the holiday home to his wife as a tenant in common.

The exchange of contracts for the sale goes ahead on 10 September, which is the date of “disposal” for CGT purposes. The resulting £100,000 capital gain (ignoring legal etc. costs) is taxable, £65,000 on Jack and £35,000 on Rose. Each is entitled to deduct their £12,300 annual exemption from their share of the gain.

Until an asset is sold it is possible to shift all or part of any gain by making an intra-spouse/civil partner transfer of it.

How can the different CGT rates be used to increase tax saving?

CGT is payable at different rates depending on:

• the type of asset being sold or transferred
• how much taxable income the seller/transferor has
• whether either business asset disposal relief (BADR) or investors’ relief (IR) applies.

If a gain results from the sale of a dwelling (or a highly specialised type of investment return, known as "carried interest") the rate of CGT payable is either 18% for basic rate taxpayers or 28% for higher rate taxpayers 28%. For gains on other assets the rates are 10% and 20% for basic rate and higher rate taxpayers respectively. Where BADR or IR applies to a gain the CGT rate is 10%.

The variable rates of CGT provide a further opportunity for tax planning.

Are there any specific tips for this type of planning?

Don’t rush into transferring a share of an asset to your spouse/civil partner. For CGT purposes the transfer can be made at any time up to the sale or transfer of an asset to a third party becomes unconditional and still be effective. This allows you time to work out the most tax-efficient share of an asset to transfer.

If the reason for transferring the asset is to shift income, CGT may be a secondary concern. However, there is nothing to prevent a transfer for income tax-saving purposes and a later transfer (including a transfer back to the original spouse/civil partner who owned the asset) to optimise ownership shares to reduce CGT.

Can I reduce CGT using my spouse/civil partner’s CGT losses?

The principle for using your partner’s capital losses is the same as that for making use of your spouse/civil partner’s CGT annual exemption and lower CGT rates. A capital loss arises where an asset is sold or transferred for less than it cost for CGT purposes. When calculating what share of an asset to transfer to your spouse/civil partner, take account of any CGT losses they have, which will reduce the gain on which they’ll be taxed.

Some CGT losses resulting from the sale or transfer of assets to a connected party, for example, a family member, cannot be used to reduce gains relating to a transaction with other persons. There’s more information about this in HMRC’s Capital Gains Tax Manual at CG1456.

When considering using capital losses be aware that they are applied to capital gains in a set order:

• capital losses are first deducted from gains made in the same tax year
• if the losses of a tax year exceed the gains of the same year, they can be used to reduce gains of later years, but
• only where the gains minus losses made in the later year exceed the CGT annual exemption.

Example

Adele plans to sell shares in BigCo Plc on which she expects to make a capital gain of £22,000. She doesn’t plan on selling any other assets. Her civil partner Emma has £6,000 of unused capital losses from many years ago. Adele and Emma are both higher rate taxpayers and so liable to the same rate of CGT.

As the end of the tax year approaches Emma reviews her CGT position; she’s made gains of £21,000 and losses of £8,000. Her net gains for the year are therefore £13,000. Adele transfers a 25% of her BigCo shares to Emma having confirmed her earlier estimate of the gain (£22,000 for the whole shareholding). Emma immediately sells the shares and makes a gain of £5,500. Adele sells her shares and makes a gain of £16,500.

Emma’s CGT position is:

	£
Gains of year	26,500
Less losses of year	8,000
Net gains for year	18,500
Less annual exemption	12,300
Remaining gains	6,200
Less losses brought forward	6,000
Gains liable to CGT	200

Adele and Emma are liable to CGT on gains of £16,700 (£16,500 + £200). If Adele had not transferred 25% of the shares to Emma, she would alone been liable to CGT on £22,000.

How can intra-spouse/civil partner transactions be used to avoid the “bed and breakfast rules”?

Another example of how couples can use CGT planning involves working around the so-called bed and breakfast anti-avoidance rules.

Prior to their introduction you could reduce your CGT over the long term simply by selling enough shares to produce a gain which was within your CGT exemption so that no tax was payable and repurchasing the same shares the next day; hence the term bed and breakfasting (B&B). The following example illustrates how B&B would have worked before the anti-avoidance rules.

Example

In 2010 Imran bought 5,000 shares in Acom Plc for £30,000. On 10 April 2022 he sold them for £40,000 making a gain of £10,000. There’s no CGT because the gain was less than the annual CGT exemption (£12,300). on 11 April 2022 Imran buys the same number and type of shares for £40,000 in total. In December 2022 he sells them for £48,000. Without the B&B rules Imran’s gain would be £8,000, i.e. £48,000 less the amount he paid for them in April 2022, £40,000, not the £30,000 he originally paid. The interim sale has reduced the gain by £10,000 for no tax cost. However, the B&B anti-avoidance rules prevent this potential tax-saving strategy.

The B&B rule says that if you buy shares of the same type within 30 days of selling them, the cost to be considered when working out the gain for a subsequent sale is the original and not the repurchase price. In our example, this would mean that the gain made by Imran from Example 24 in December 2022 is £18,000 (£48,000 - £30,000). After knocking off the annual CGT exemption of £12,300, the remaining £5,300 of the gain would be taxable at up to 20%.

You can dodge the B&B rules by leaving more than 30 days between the sale and repurchase of the shares. However, if in the meantime the share price goes up, the increased cost of buying them back reduces the saving from the sale and repurchase arrangement. To get around this, one spouse or civil partner can sell the shares and the other purchase them the following day, or even the same day. After 31 or more days they can give the shares to the first spouse.

Example

Imran owns 5,000 shares in Bcom plc, which he bought for £15,000 in 2013. He sold them on 31 March 2022 for £25,000, making a gain of £10,000. Imran made no other sales or transfers in the tax year. As the gain is less than the annual exemption there’s no CGT. Also on 31 March, Imran’s wife buys 5,000 Bcom plc shares for £25,000. After 31 days she gives them to Imran, which, because of the no-gain no-loss rule, counts as a sale at cost price, i.e. £25,000, so there’s no taxable gain or loss for Imran’s wife. The cost of the shares for Imran for CGT purposes is £25,000 and not the original £15,000.

What’s the tax position if one spouse/civil partner transfers assets to the other in the year of marriage or separation?

The CGT rules for years of marriage and separation are simple but can have significant consequences.

In the year of marriage, the special no-gain no-loss rule for spouses/civil partners doesn’t apply until the marriage or civil partnership is registered.

For the year in which the couple become permanently separated the special rule for spouse/civil partners continues to apply until the end of the tax year (5 April). From the start of the following tax year the normal rules apply. Note that the government has proposed changing these rules so that the no-gain no-loss rules won’t only apply until the end of the tax year in which permanent separation takes place but will apply until the end of the fthird subsequent tax year. This is expected to apply from April 2023. But as the rules stand for 2022/23, if separation takes place near the end of the tax year couples won’t have long to take advantage of the no-gain no-loss rule.

Can a transfer of a share of the family home by a separated spouse ever be exempt from CGT?

Yes, even after the no-gain no-loss rule ceases to apply another special rule can prevent a CGT charge if conditions are met. The following example explains where the special rule might apply.

Example

Jeanette and Dougie separated permanently on 2 January 2022. Several days after separation Jeanette moved into a home of her own. The marital home was bought jointly for £300,000 (including costs) on 30 July 2017. Dougie and Jeanette agreed to sell the property, and proceeds of £480,000 (net of costs) are expected from the sale contract signed in early March 2024. PRR only applies to 62 (53 months when she lived there plus the last nine months of ownership) of the 80 months Jeanette has owned a stake in the property; if the sale is made as joint owners Jeanette faces a CGT bill on her share of the gain not covered by PRR.

However, if Jeanette sells her share of the property to Dougie (note that this transaction is exempt from SDLT), who then sells to a third-party buyer, she can take advantage of the special CGT rule which says PRR can apply to the gain for the period after she left the property.

The rule mentioned in this example can apply to a sale or transfer of the property from one spouse (or former spouse) to the other:

• if there’s an agreement or court order relating to the separation or divorce
• after one spouse ceases to live in the property the other continues to occupy it as their main residence until the transfer; and
• the absent spouse hasn’t, in the period between leaving the property and the sale to the other spouse, elected for another property to be their main residence for CGT purposes.

Jeanette won’t be liable to CGT on the sale of the former marital home even though she owns another property to which PRR can apply. The rule allows her to claim the PRR against the gain on her former home.

Warning. Because PRR can only apply to one property Jeanette will not be entitled to it for her new home in respect of the period between the time she moved out of the marital home and when she transferred her share of it to Dougie. She therefore needs to weigh up the pros and cons of using the special rule.

A similar rule allows a spouse/civil partner who is absent from the family home because of permanent separation to claim PRR on the sale of the former marital home if their children have continued to live there.

INHERITANCE TAX

What are the general rules for transfers between individuals for IHT purposes?

Normally, where an individual transfers some of their wealth to another individual it is a potentially exempt transfer (PET) for IHT purposes. If the individual who made the transfer lives for another seven years, it becomes fully exempt; if not it becomes a failed PET and chargeable to IHT. The normal rules do not apply for transfers from one spouse/civil partner to the other.

What’s the general IHT rule for transactions between an individual and their spouse/civil partner?

Each spouse/civil partner has their own annual exemption for IHT which has remained at £3,000 for many years. However, for intra-spousal transfers the annual exemption doesn’t come into play because such transactions are wholly exempt from IHT. There is a limit for this exemption where one spouse is not domiciled in the UK.

Warning. If you are UK domiciled and your spouse/civil partner is not, the exemption for transfers to them is restricted to £325,000. An irrevocable election can be made to treat the non-domiciled spouse as being UK domiciled, but this should be considered carefully as it has immediate tax consequences. Advice should be sought before acting.

The spousal exemption applies to transfers from one spouse/civil partner to the other, whether made during their lifetime or through a will or intestacy. This means that unlike transfers between other individuals, one made by one spouse/civil partner to the other in their lifetime immediately reduces the value of the transferor’s estate and increases that of the recipient; the IHT position is not altered by the death of either spouse.

Warning. The value of a transfer for IHT purposes is the amount by which the transferor’s total net worth (referred to as their estate) reduces. However, this can increase the receiving spouse/civil partner’s estate by a different amount.

Example

Dawn owns 40% of the shares in Fcom Ltd and her husband Tim, 20%. The remaining shares are owned equally by two persons not connected with either Dawn or Tim. Dawn’s shareholding is valued at £400,000 and Tim’s at £150,000. While Tim owns exactly half as many shares as Dawn, the value is less than 50% because at 20% Tim’s fewer rights under company law make his smaller shareholding proportionately less valuable.

Tim gives Dawn his shares so that she becomes the 60% shareholder of Fcom. The gift reduces Tim’s estate by £150,000 but Dawn’s increases by £250,000. The reason for the disproportionate increase in Dawn’s estate is because with Tim’s share she now owns 60% of Fcom and therefore has control of the company, i.e. because she can outvote all the other shareholders acting together.

The next example illustrates how the rule for so-called “related property” works in slightly different circumstances. Related property is any asset that belongs to your spouse or civil partner where you also have an interest, e.g. a jointly owned bank account. Related property can include assets that you, your spouse or civil partner have transferred to certain exempt organisations, e.g. to political parties and charities during the previous five years.

The value of your estate is measured after taking into account any related property, where it results in a higher valuation. The value of a transfer of related property is calculated using the formula:

(Estate property x Combined value)/(Estate property + Related property)

Example

Gina owns 50% of a manufacturing business; the other half is owned by her husband. She gives away half of her share to her daughter on her 21^st birthday.

The values of the relevant shares in the business are as follows:

	£
25%	80,000
50%	200,000
75%	320,000
100%	500,000

Using the formula above, the values of Gina’s share of the business are as follows:

	£
Gina’s estate	200,000
Related property (her husband’s share)	200,000
Combined value pre-transfer	500,000
Gina’s share after the transfer	80,000
Combined share after the transfer	320,000

The value of Gina’s transfer is calculated as follows:

	£
Value of estate pre-transfer
200,000/(200,000 + 200,000) x 500,000	250,000
Value of estate post-transfer
80,000/(80,000 + 200,000) x 320,000	(91,429)
Value of transfer	158,571

What’s the IHT position if a couple separate or divorce?

Unlike with income tax or CGT, the date a couple separate is not relevant for IHT. It’s the date their divorce becomes final (the issue of a decree absolute by a court) which signals the end of the marriage or civil partnership for IHT purposes.

What are IHT transferrable nil rate bands?

Before considering the transferrable aspect of nil rate bands (NRBs), you need to understand what they are.

As the name suggests, they simply apply a 0% rate of tax to the first part of an estate before the main rate applies.

Where an individual’s estate is chargeable to IHT, the rate of tax is 0% up to the NRB; set at £325,000 until at least April 2026. It automatically applies to all estates. The residence nil rate band (RNRB) is in addition to this, but is subject to conditions, and applies when a transfer is made from a deceased individual’s estate which is either their former home (or a share of it) or value derived from the sale of their former home. This RNRB is sometimes referred to as the main residence nil rate band and is set at £175,000 until April 2026.

Unused NRB and RNRBs can be transferred from one spouse/civil partner’s estate to the other. Where an individual who is married or in a civil partnership dies and the amount of their estate chargeable to IHT is less than the NRB, the unused part can be claimed by the executors of the surviving spouse/civil partner’s estate when they die. The same is true for the RNRB (remember that unlike the NRB, conditions must be met for the RNRB to apply). These transferable rate bands are known as the transferrable nil band (TNRB) and the transferrable residence nil rate band (TRNRB).

Warning. Both the TNRB and the TRNRB must be claimed (on Forms IHT402 and IHT336 respectively) by the executors/administrators of the estate of the second spouse/civil partner. There are strict time limits for this (normally two years from the date probate or letters of administration are granted).

Note. Because someone’s death can be many years after that of their spouse/civil partner’s, it’s important that on the first death the surviving spouse/civil partner keeps a record of how much of the NRB and RNRB was used by the deceased’s estate. While HMRC keeps a record of this it is not obliged to notify the executors or administrators of an estate. This means it is easily overlooked if records haven’t been kept and those concerned, e.g. executors and beneficiaries of the surviving spouse/civil partner, haven’t been made aware of them.

Is there any IHT planning possible with TNRBs?

In most situations the main consideration is knowing that the first spouse/civil partner to die didn’t use all their NRB or RNRB. However, there are circumstances where steps can be taken to make better use of them. Specifically, where:

• someone is widowed
• the deceased’s estate is entitled to business property relief (BPR) or agricultural property relief (APR).

We’ll look at these two points in order.

The NRB, widows and widowers

When a person dies it’s possible for the surviving spouse/civil partner to claim the TNRB relating to their former spouse/civil partner even if they remarry. The next two examples show how this can work in slightly different circumstances.

Example

Rachel is married to Ross and they have a child, Joey. Ross dies leaving his entire estate to Rachel. A few years later Rachel marries Richard; he had one child, Janice, from a previous marriage which ended in divorce.

Rachel and Richard’s combined estate is worth £975,000, which after both their deaths they want to leave equally between the two children. To achieve the most IHT-efficient result some planning is needed; especially because Ross’s NRB was not used on his death.

If Rachel leaves her entire estate to Richard and he dies after her, his executors can claim Rachel’s unused NRB (£325,000) plus his own. That’s a total of £650,000. If his estate is also entitled to the full RNRB (£175,000) IHT at 40% is payable on £150,000 (£975,000 - £650,000 - £175,000). Ross’s unused NRB isn’t used and so is wasted.

If instead Rachel left £325,000 of her estate to a discretionary trust (with Richard as a named beneficiary) and the rest to Richard direct. Ross’s unused NRB is used against the £325,000 transferred to the trust when she dies so there’s no IHT on that. There’s also no IHT on the assets which pass to Richard because that is an intra-spouse transfer and so is exempt. Rachel’s NRB remains intact and can be used by Richard’s estate when he dies.

Note that the trust can include instructions on how to distribute its funds, e.g., equally to Joey and Janice when Richard dies. IHT will only be payable on the assets in the trust if their value exceeds the NRB (assumed to still be £325,000).

Summary. Ross’s NRB (£325,000) was transferred to Rachel who used it in full to prevent IHT on the transfer of a gift to a trust on her death. Richard’s executors claimed the TNRB from Rachel’s estate, which when added to his own NRB meant that £650,000 of his estate was IHT free. £925,000 (£325,000 x 3) of Rachel and Richard’s joint wealth escaped IHT.

The suggestion of a trust in the second example implies high-end tax planning involving expensive lawyers and accountants. In fact, that’s not the case and while creating a suitable trust for IHT efficiency is not something that should be tackled unless you have the right experience, it is something that local solicitors and accountants can handle. If a trust can save your estate up to £130,000 (£325,000 x 40%) by use of an extra NRB, and so leave your beneficiaries that much better off, spending £2-3,000 on expert help is a small price to pay.

Business or agricultural property relief

When an individual in a marriage or civil partnership who has children dies while owning assets which qualify for BPR or APR, IHT can be reduced by not transferring the BPR/APR qualifying assets to the surviving spouse/civil partner. The following example shows two different ways in which an individual can transfer the same value from their estate to their spouse/civil partner, but with different IHT outcomes.

Example 32

Peter died in August 2019 leaving the following estate:

	£
Home - jointly owned (Peter’s share)	300,000
Unquoted shares in the family company (qualifying for BPR)	600,000
Savings, investments and other assets	800,000
Total	1,700,000

On Peter’s death his half-share in the house automatically passed to Wendy as the other joint owner. In his will, Peter left £325,000 in savings and cash, equally between his two children. The residue of his estate went to Wendy.

The bequest to his children used Peter’s NRB in full. The transfer of the balance of the estate to Wendy was exempt because it was a transfer between spouses. Therefore, no IHT was payable on Peter’s death. This might seem reasonably tax efficient, but it wastes the BPR; it would have reduced the IHT to zero without the spousal gift exemption.

Wendy died in April 2022 leaving her whole estate to her children. To illustrate the point of this example clearly, we’ve assumed the value of the assets she inherited from Peter stayed the same and that the value of her other assetsr emained constant. The value of Wendy’s estate was:

	£
Home	600,000
Unquoted shares in the family company (qualifying for BPR)	600,000
Wendy’s own savings, investment and other assets	325,000
Savings, investments and other assets from Jack’s estate	475,000
Total	2,000,000

Wendy’s unquoted shares qualified for BPR. After deducting the NRB (£325,000, the RNRB (£175,000) and the TRNRB (£175,000) the remainder of her estate of £725,000 was liable to IHT resulting in a tax bill of £300,000 (£725,000 x 40%).

If instead Peter had left £325,000 worth of shares in the business to his children, BPR would have reduced the amount chargeable to nil and left Peter’s NRB intact. The transfer of the remainder of his estate to Wendy would be exempt.

In November 2019, a few months after Peter’s death, Wendy bought the shares from her children for £325,000. The position is now the same as it was under the terms of Peter’s original will. The children have the cash while Wendy has the house, company shares and the remainder.

When Wendy dies her estate is identical to how it was in the first part of the example but the IHT position is different.

	£
Home	600,000
Unquoted shares in the family company (qualifying for BPR)	600,000
Wendy’s own savings, investments and other assets	325,000
Savings, investments and other assets from Jack’s estate (£800,000 - £325,000 used to buy shares from children)	475,000
Total	2,000,000

Wendy’s estate would get her NRB (£325,000) plus the TNRB (£325,000) from Peter’s estate. Also, the RNRB (£175,000) and the TRNRB (£175,000) from Peter. The shares qualify for BPR (£600,000). This leaves £400,000 on which the IHT, at 40%, is £160,000.

An analysis of the calculations shows that the IHT saving of £140,000 (£300,000 - £160,000) is entirely from the TRNB of £325,000.

CHILDREN

Can I transfer income-producing assets to my children to save tax?

Generally, no. The settlement rules apply to transfers of income between parents and their children, while they are minors. The effect of this is that if a parent gives money or an asset to their child, any income that it produces is taxable on the parent that transferred the money or asset. The settlement rules do not apply to income generated from parental gifts if, for a tax year, it’s no more than £100. The £100 limit applies for each parent. However, where the income exceeds £100 the whole amount is caught by the rules and is taxable on the parent who gave the money or assets to the child.

The settlement rules don’t apply to income of a child which is generated from gifts by others, that is, anyone other than a child’s parent.

The settlement rules don’t apply to income generated by a Junior individual savings account, even where the investment was made from the parents’ funds.

What’s the tax position if my child makes a capital gain from an asset I gave them?

The settlement rules do not apply in the same way to capital gains as they do to income. If you give an asset, say shares in a company, to your minor child, for tax purposes you are treated as having sold it to them at the market value (the price an unconnected third party would be willing to pay for it). You might therefore have tax to pay even though you received no money for the asset. However, from that point on any gains (or losses) which accrue to the asset are your child’s.

Example

Dick and Jane are married and have a son Tim. On Tim’s first birthday Jane gives him shares in BigCo Plc worth £25,000. She inherited them from her father 15 years ago when they were worth £10,000.

For CGT purposes the gift is treated as a sale at £25,000 and so Jane is taxable on a gain of £15,000. After knocking off her annual exemption of £12,300 Jane must pay CGT on £2,700. Which as a basic rate taxpayer is just £270.

The BigCo’s shares generate between £1,000 and £1,500 per year. This exceeds the £100 limit and so the settlement rules apply, and Jane is taxable on that income.

Ten years later (when Jane has become a higher rate taxpayer) BigCo shares have leapt in value to £45,000. Dick and Jane decide the time is right to cash in on the gain on Tim’s behalf. They sell the shares. Tim is taxable on a capital gain of £20,000 (£45,000 - £25,000). After deducting his annual exemption, say £15,000, Tim will pay CGT on £5,000. Assuming CGT remains unchanged from their current rates, Tim’s tax liability is just £500 (£5,000 x 10%).

Dick and Jane must report the gain to HMRC on Tim’s behalf and settle the tax bill, which they can do out of the sale proceeds from BigCo’s shares.

Had Jane not given the shares to Tim and instead kept them until they were sold for £45,000 the CGT bill would have been much higher at £4,000.

What’s the IHT position on gifts to my minor child?

Small gifts up to £250 per year are exempt as are gifts which together with all other gifts in the same tax year do not exceed £3,000.