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The short answer
A large gift you make from the UK to family in Nigeria is not taxed when you make it, but if you die within seven years it can count towards your estate for UK inheritance tax. Each tax year you can give £3,000 free of this rule, carrying one unused year forward, and regular gifts out of surplus income are exempt without limit. Tax is charged on gifts only if together they exceed the £325,000 threshold.
Diaspora families move serious money: £40,000 towards a brother's house in Abuja, £15,000 to clear a parent's hospital bill, a monthly allowance that adds up over years. None of it is taxed on the day you send it. UK inheritance tax only looks back if you die within seven years. This guide explains how that works and which exemptions protect most family support. It is information, not tax advice.
The seven-year rule
GOV.UK's gift rules say a gift is free of inheritance tax if you live for seven years after making it, unless it is exempt anyway. If you die within seven years, it can count towards your estate and towards the £325,000 threshold.
Where gifts made in the seven years before death are together above £325,000, tax on the gifts themselves is reduced on a sliding scale for gifts made three to seven years before death:
| Years between gift and death | Inheritance tax rate on the gift |
|---|---|
| Less than 3 | 40% |
| 3 to 4 | 32% |
| 4 to 5 | 24% |
| 5 to 6 | 16% |
| 6 to 7 | 8% |
| 7 or more | 0% |
GOV.UK notes that the sliding scale applies only to gifts above the threshold. For most families, the practical effect of a gift within seven years is that it uses up part of the threshold, so more of the rest of the estate is taxed.
Gifts that are exempt from the start
- Annual exemption: £3,000 of gifts each tax year (6 April to 5 April), and you can carry one unused year forward.
- Small gifts: up to £250 per person per tax year, as many people as you like.
- Wedding gifts: up to £5,000 to a child, £2,500 to a grandchild and £1,000 to anyone else.
- Normal expenditure out of income: regular gifts from income, after which you can still afford your normal standard of living. GOV.UK gives financial support to an elderly relative as an example.
The last exemption matters most for diaspora families. A steady monthly allowance to parents, paid from salary, can be exempt however large the yearly total, if you can show it is regular, comes from income and leaves you able to live normally. Our guide to regular support for parents covers the evidence, and the £3,000 annual exemption explains carry-forward.
Worked example
Example. Kemi, a UK resident, sends her brother £60,000 in May 2026 to finish his house in Abuja. She made no gifts in 2025 to 2026.
| Step | Amount |
|---|---|
| Gift | £60,000 |
| Annual exemption 2026 to 2027 | −£3,000 |
| Unused annual exemption 2025 to 2026 carried forward | −£3,000 |
| Gift counted if she dies within seven years | £54,000 |
If Kemi dies in 2030, the £54,000 uses up part of her £325,000 threshold, leaving £271,000 for the rest of her estate. No tax falls on the gift itself because it is below the threshold. If she lives until May 2033, the gift drops out entirely. She also sends her mother £400 a month from her salary, which may be exempt as normal expenditure out of income, separately from the £60,000.
Paying bills directly
Paying a relative's hospital bill, a nephew's school fees or a builder working on your parents' house is still a gift to the person who benefits, even though the money never passes through their hands. The same exemptions apply. Large one-off payments of this kind are the ones to log carefully, because they rarely fit the pattern of regular gifts out of income. A loan is different from a gift: if you expect repayment, write it down and agree terms, so your executor can show it was a loan and not a transfer that counts towards your estate.
Does residence matter?
Since April 2025, whether your non-UK assets are in scope depends on whether you have lived in the UK for 10 of the last 20 years, as our guide to inheritance tax and Nigerian property explains. Money sent from a UK account generally starts as a UK asset, so the seven-year rule is the one to plan around whatever your residence history; take advice if your position is close to the 10-year line.
Nigeria's side
NiDCOM's 2026 diaspora guide says personal remittances sent to family members in Nigeria are not taxed as income in Nigeria, and that gifts are not treated as taxable income. Your brother does not pay Nigerian income tax on the money he receives from you.
Keep a record
Your executor has to report gifts made in the seven years before death. A simple log helps: date, amount in pounds, recipient, purpose, and which exemption you relied on. Our guide to keeping a record of money sent home sets one up.
Where Pryme fits
When you send money with Pryme, the app shows the rate and the fee before you approve, and every transfer appears on your statement. You can generate a verifiable statement through VerifyDoc.ai, which an executor can rely on as unaltered. See receipts and statements.
Questions people ask
Is there UK tax on money I send to family in Nigeria?
Not when you send it. A large gift can count for inheritance tax if you die within seven years, unless an exemption applies.
How much can I give each year without inheritance tax?
£3,000 a year under the annual exemption, with one unused year carried forward, plus £250 small gifts per person and regular gifts out of income.
Is a monthly allowance to my parents counted for inheritance tax?
It can be exempt as normal expenditure out of income if it is regular, paid from income and leaves you able to keep your normal standard of living.
Does my brother in Nigeria pay tax on the gift?
NiDCOM's guide says gifts and personal remittances to family are not treated as taxable income in Nigeria.
Sources
- GOV.UK: Inheritance Tax, gifts · accessed Oct 2026
- GOV.UK: Inheritance Tax (updated 30 Sep 2026) · accessed Oct 2026
- GOV.UK: Inheritance Tax when someone living outside the UK dies · accessed Oct 2026
- NiDCOM / NGEX: Diaspora guide to Nigeria's tax reforms 2026 (Jan 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.