Gifting can be a powerful tool in estate planning, particularly for high-net-worth individuals seeking to pass wealth on tax-efficiently. But understanding the rules around 

, especially the seven-year rule, is essential to avoid unintended liabilities. Here's what you need to know, based on guidance from 

Not all financial gifts are equal in the eyes of HMRC. Some are immediately exempt from IHT, while others may become taxable depending on their size, structure, and timing.

, the following gifts are typically tax-free 

How Inheritance Tax works: thresholds, rules and allowances

Gifts between spouses or civil partners (provided both are UK-domiciled)

Up to £3,000 per tax year (the annual exemption)

Small gifts under £250 per person per tax year

Regular gifts made from surplus income; these must be part of a consistent pattern and not affect your standard of living

Gifts that don’t qualify for these exemptions are classed as 

, and that’s where the seven-year rule becomes relevant.

 explain, PETs are only fully exempt from IHT if the donor survives for seven years after the gift is made. If the donor dies within that period, the gift becomes “chargeable” and may reduce the available nil-rate band (currently £325,000 per person) 

Inheritance tax: the risks of giving the family home to your children early

For example, if someone gives away £100,000 and dies within seven years, their nil-rate band is reduced to £225,000, increasing the IHT exposure on their estate.

If death occurs between three and seven years after a gift is made, taper relief can reduce the amount of tax payable on the gift, though not on the rest of the estate.

It’s important to note, as Evelyn highlights, that 

More Complex Gifting: Trusts and the 14-Year Rule

If you're using trusts as part of your estate plan, things can get more complicated. Certain gifts into trusts may trigger immediate IHT charges. In some cases, the 14-year rule can apply, where earlier gifts affect how later ones are taxed, especially if multiple gifts were made in succession. Professional guidance is essential here to avoid overlapping liabilities 

How to gift your way to a lower inheritance tax bill

Real-World Examples: How Gifting Impacts Tax Bills

Evelyn Partners provides illustrative case studies 

Families warned on surprise inheritance tax bills as more gifts come with tax sting in the tail

Mrs Smith gave her son £100,000 and died four years later. This reduced her nil-rate band and led to an IHT bill of £310,000 on her £1 million estate.

Mr Jones gave his daughter £500,000 and died six years later. His daughter benefited from taper relief, paying only £14,000 on the gift above the nil-rate band, but the entire estate remained fully taxable.

You can explore those full examples in Evelyn’s article 

The seven-year rule - why it matters when making financial gifts

Recent Trends: A Surge in Lifetime Gifting

, UK parents gave a record £9.6 billion to their children in 2024, much of it to help with 

 purchases, and often with the intention of minimising future IHT.

This growing trend reflects increased awareness of IHT thresholds and the benefits of acting early. More families are using exemptions like the annual allowance and the seven-year rule to pass on wealth during their lifetime, helping loved ones now while reducing the potential tax burden on their estate later 

UK could raise more inheritance tax by adopting measures used by G7 peers, says think-tank

Final Thought: Professional Advice is Key

The potential tax savings from thoughtful gifting are significant, but so are the risks if done improperly. A qualified 

Determine how much you can afford to gift without impacting long-term security

Ensure gifts are structured to make the most of exemptions and reliefs

Document surplus income gifts appropriately

Manage any exposure from trust-based giving

, we connect clients with trusted firms like Evelyn Partners and others, all of whom offer deep estate planning expertise. If you're thinking about making financial gifts, professional advice is one of the best gifts you can give not only yourself, but your beneficiaries too.

If you’re looking to get the ball rolling in terms of finding expert financial advice, just click the orange “Start comparing” button now to get going, or check out our 5* reviews from 

 – Lifetime gifts within HMRC allowances can lower your estate’s value and reduce future inheritance tax exposure.

 – Larger gifts are classed as potentially exempt transfers and only become tax-free if you survive seven years, with taper relief applying in some cases.

 – Regular gifts made from surplus income, rather than capital, are exempt from inheritance tax if they do not reduce your standard of living.

 – Trusts and other estate planning tools can protect family wealth, improve tax efficiency, and ensure funds pass to the right beneficiaries.

 – Gifts with reservation or poorly structured transfers may still be counted within your estate for inheritance tax purposes.

 – Wealth managers help integrate gifting, tax strategy, and estate planning into a cohesive approach to long-term wealth protection.

Financial Gifts and Inheritance Tax: What Investors Need to Know

Are you thinking about buying a second property, flipping houses, or investing through a company in 2025? This guide explores the financial and 

 implications of property investment in today’s UK market, with explanations and stats to help you decide.

A Shifting Landscape for UK Property Investors

 market has long been viewed as a stable route to building wealth. But in 2025, would-be investors face a more complex environment: rising mortgage rates, reduced tax reliefs and stricter regulations for landlords 

UK House Price Index for July 2025

Whether you're considering a second home, a buy-to-let through a company or flipping for profit, it's time to ask: 

Buying a Second Property: Still a Smart Move?

Purchasing a second property, often for rental income or long-term appreciation, can offer financial upside, but the barriers to entry have increased 

Private rent and house prices, UK: July 2025

Monthly rental income (UK average rent: £1,339 per month as of May 2025 via 

Long-term capital appreciation, especially in high-demand areas

 (SDLT) surcharge of 3% on additional properties (via 

Higher interest rates for second property mortgages (typical rates 5.5-6.5%)

Ongoing costs: insurance, letting agent fees, maintenance, and void periods

 It is worth considering in growth areas or for retirement planning, but only with strong rental yield and a clear exit strategy.

Flipping Property in 2025: Profitable or Pipedream?

Property flipping, buying, renovating and selling for profit, can generate quick returns, but it comes with risk.

 (CGT) of up to 24% on profit for higher-rate taxpayers (

Rising material and labour costs post-Brexit and during ongoing 

Local councils are tightening planning permission timelines

If you buy a home for £250,000, spend £50,000 on refurbishment, and sell for £350,000, your taxable gain is £50,000. As a higher-rate taxpayer, CGT could be as much as £12,000 

Capital Gains Tax: what you pay it on, rates and allowances

 Still viable for experienced investors, but tight margins mean due diligence and accurate cost forecasting are essential.

Should You Use a Limited Company to Invest in Property?

There’s been a surge in landlords using limited companies to hold property, over 320,000 buy-to-let properties are now owned via corporate structures, via 

Mortgage interest is fully tax-deductible for companies (unlike personal ownership, where relief is limited)

Corporation tax capped at 25% vs. personal income tax of up to 45%

Ability to retain profits within the business for reinvestment

Higher mortgage rates for company borrowers (typically 0.5-1% more)

Annual reporting obligations and accounting costs

Personal use of property becomes restricted

 Investors building a portfolio or higher-rate taxpayers looking to reduce tax exposure over the long term.

Understanding the 2025 Tax Landscape for Property Investors

Taxes have become a major deciding factor in property investment, so staying on top of them is vital for successful investors.

Make sure you always factor in tax when assessing potential returns, particularly on short-term holds and second homes.

Is Property Still a Good Investment Compared to Other Assets?

UK residential property values grew 3.5% in the year to May 2025, with London and the South East seeing the strongest performance (

). Rental yields remain solid, averaging 5.2% across the UK, and up to 7% in parts of the Midlands and North West, according to 

 and infrastructure funds are offering stable 6-9% yields with less hassle

 Property remains a good diversifier, but it’s no longer the only viable route for capital preservation or income generation.

Is Investing in Property Worth It in 2025?

 Property can still deliver long-term wealth, but it's become a more hands-on, tax-sensitive, and financially demanding asset class 

Emerging Trends in Real Estate: Global Outlook 2025

But if you’re looking for passive income, minimal tax hassle, and flexibility? Consider 

UK property investment faces new pressures

, with higher interest rates, stricter landlord rules, and reduced tax relief reshaping potential returns.

Buy-to-let property can still deliver value

, but only where rental yields are strong and long-term capital growth offsets rising costs.

, as renovation costs, capital gains tax, and tighter planning rules reduce profit margins.

Investing through a limited company offers tax benefits

, including deductible mortgage interest and lower corporation tax, but higher borrowing costs and admin requirements apply.

, with stamp duty surcharges and capital gains tax cutting into investor profits.

, though REITs, equities, and private credit may provide stronger returns or greater flexibility.

, with long-term portfolio builders best placed to benefit, while passive income seekers may prefer alternative assets.

Is Investing in Property Worth It? A 2025 Guide for UK Investors

 doesn’t always unfold as planned. For many, stepping away from work brings unexpected challenges: loneliness creeps in, motivation fades, and financial burdens can surface amid rising living costs. Increasingly, retirees are discovering that “unretiring”, meaning returning to the workforce, either part-time, full-time, or even starting their own business, can transform these drawbacks into opportunities. Beyond providing a financial boost, re-engaging in purposeful work can reinvigorate daily routines, sharpen the mind, and reconnect individuals with social and professional circles.

In this article, we explore why unretiring is becoming a popular choice and the myriad benefits it offers: from supplementing retirement savings and protecting retirement income to enhancing mental health benefits, preserving identity, and delivering intellectual satisfaction. Far from a step backward, it can be a strategic and fulfilling twist on traditional retirement years 

The retirees heading back to work

Retirement used to be the finish line. But increasingly, it’s becoming a pause, and for many, a new starting point. Whether by choice or necessity, more retirees are “unretiring” and returning to the workforce in some capacity. In fact, a 2024 report from the 

 showed that over 180,000 individuals aged 55+ re-entered employment in the UK between 2022 and 2024, reversing a long-term trend of early exits from the labour market.

But unretiring isn’t just about topping up your 

. It’s often about a renewed sense of purpose, social interaction, financial resilience, and even peace of mind 

Britain’s ‘great unretirement’: cost of living drives older people back to work

Contrary to the stereotypical image of retirement as a sun-drenched escape, many find that full-time leisure quickly loses its appeal. Studies from the ONS Over-50s Lifestyle Survey show that 46% returned to work for social reasons, and 42% to improve mental health.

Returning to work, even part-time or in a consulting role, can:

Restore a sense of routine and achievement

Support better overall mental health and lower depression risk

Help reduce fewer health problems by encouraging activity and structure

Interestingly, the study found that subjective financial strain or lower income did not reliably correlate with unretirement, suggesting that returning to work is not, for many, solely a matter of financial necessity 

. These lifestyle benefits are particularly compelling for high achievers and professionals used to high levels of engagement.

Returns to work after retirement: A prospective study of unretirement in the United Kingdom

While purpose matters, the financial benefits of unretiring can also be significant:

 Continuing to earn, even modestly, can reduce reliance on pension withdrawals and preserve capital during market downturns.

 The longer you defer drawing from pensions or ISAs, the longer your investments have to benefit from compounding growth and extended longevity of retirement assets.

 complexities but also planning opportunities. For example:

Income below the personal allowance (£12,570 for 2024/25) may be tax-free

Rebuilding pension contributions (within limits) could help recover or maximise tax relief 

Tax on your private pension contributions: Annual allowance

Managing the tax implications of pension withdrawals alongside earnings

Gifting from income, if surplus, can also support estate planning strategies

For many, these steps help protect the level of pension benefits and ensure greater financial security across the years of retirement. While specific tax advice should be personalised, unretiring opens the door to new optimisation strategies worth exploring with a qualified adviser 

Rethinking Retirement Planning Amidst Aging Demographic Frontiers

A Broader Trend and a Post-Pandemic Shift

Unretiring isn’t just an individual choice, it’s part of a larger trend. According to the 

, over 1 in 10 workers aged 60+ have considered returning to work or delaying retirement age. The 

 also reports that 4 in 10 pandemic-era retirees would consider re-entering the workforce if meaningful, flexible roles were available.

Even employers are taking notice. Flexible roles, phased retirements, and senior advisory positions are increasingly being offered to tap into experienced talent, often on the retiree’s terms 

The coronavirus pandemic and older workers

Unretiring can be rewarding, but it’s not without logistical implications:

 Earnings may affect means-tested benefits but won’t reduce your State Pension entitlement once you’ve reached full retirement age.

, The Money Purchase Annual Allowance (MPAA) limits contributions to £10,000/year if you’ve already accessed taxable pension income.

 Returning to work could impact private cover, NHS access, or introduce employer-provided options that help offset unexpected medical expenses or expensive private plans.

 Consider the balance; working too much might edge into higher tax brackets, reduce lifestyle flexibility, or increase potential future costs.

Individual circumstances such as interest rates, lower medical expenses from employer benefits, or 

 legislation will also shape whether unretiring is the right choice.

Unretiring can be a practical way to reach retirement goals more effectively. By continuing to earn income, you reduce reliance on pension withdrawals and give your retirement savings more time to grow. It also helps manage unexpected medical expenses, smooth out the impact of interest rates on investments, and create peace of mind around long-term financial security. Beyond the numbers, returning to work provides social interaction, structure, and mental health benefits that can make your years of retirement more rewarding and sustainable.

Unretiring is no longer a niche concept; it’s a rational, often empowering move that combines financial prudence with personal fulfilment. Whether you’re looking to make a difference, safeguard your long-term assets, or simply stay sharp, the case for returning to work is more compelling than ever. And the best part? It’s on your terms.

If you’re considering a return to work and want to align it with your broader financial goals, Compare Wealth Managers can help. We connect you with FCA-regulated advisers who understand how to integrate unretirement into a thoughtful wealth strategy. Just click “Start comparing” to begin, or read our 5* Trustpilot reviews.

 – More than 180,000 over-55s in the UK have returned to work since 2022, turning retirement into a new beginning rather than the end of a career.

 – Many retirees “unretire” for social connection, routine, and mental health, with studies showing improved well-being and reduced loneliness.

 – Even modest earnings can protect pensions, delay withdrawals, and keep investments compounding during uncertain markets.

 – Returning to work can unlock allowances, pension top-ups, and estate planning strategies, helping retirees optimise their finances.

 – Employers increasingly offer part-time, advisory, and phased retirement options to tap into the skills of experienced professionals.

 – Be mindful of pension contribution limits, healthcare cover, and potential tax bands to balance income with lifestyle flexibility.

 – Unretiring is less about necessity and more about combining financial security with meaning and fulfilment, on your own terms.

Stuart Gray

Bio

Articles from author

Financial Gifts and Inheritance Tax: What Investors Need to Know

Is Investing in Property Worth It? A 2025 Guide for UK Investors

The Surprising Benefits of Unretiring

Start your journey to your
Financial well-being

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Stuart Gray

Bio

Articles from author

Financial Gifts and Inheritance Tax: What Investors Need to Know

Is Investing in Property Worth It? A 2025 Guide for UK Investors

The Surprising Benefits of Unretiring

Start your journey to your Financial well-being

FIND OUT MORE

LEGAL

CONTACT US

Start your journey to your
Financial well-being