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The short answer
Money you send your parents regularly from your income, while still keeping up your own standard of living, can be exempt from UK inheritance tax straight away under the 'normal expenditure out of income' exemption, with no seven-year wait. HMRC's manual sets three conditions: the gifts are part of your normal spending, come from income rather than capital, and leave you enough income to live as usual. Your executors claim it after your death, so the records you keep now are what make it work.
For many Nigerians in Britain, a standing order or monthly transfer to parents at home is as fixed as rent. It pays for food, drugs, a driver, a generator's diesel. Few people think of it as a gift for tax purposes, but under UK inheritance tax (IHT) that is what it is. The good news is that UK law has an exemption built for exactly this kind of steady, affordable giving, and it has no upper limit.
Why your monthly transfers count as gifts
GOV.UK explains that gifts you make in the seven years before you die can be added back to your estate for IHT. Some gifts are exempt whatever happens, and the page lists the main ones: the £3,000 annual exemption (with one year's carry-forward), small gifts of up to £250 per person, wedding gifts, and payments that are part of your normal expenditure out of income. GOV.UK gives financial support to an elderly relative as an example of the last one, and says there is no limit on how much can be given this way, as long as the payments are regular, come from your income and you can afford them after your usual living costs.
That matters because the annual exemption alone covers only £3,000 a year. Someone sending £400 a month sends £4,800 a year, and the excess over £3,000 would otherwise be a gift that only drops out of the IHT picture after seven years. For the wider gift rules, see gifts to family in Nigeria and the seven-year rule.
The three conditions HMRC applies
HMRC's Inheritance Tax Manual (IHTM14231, updated 7 April 2026) says the exemption applies only if the gift:
- formed part of the giver's normal expenditure;
- was made out of income, not capital; and
- left the giver with enough income to keep up their usual standard of living.
All three must be met. Part of a gift can qualify, with the rest falling under another exemption or being treated as an ordinary gift.
What 'normal' means
IHTM14241 says 'normal' means normal for you, not for the average person. HMRC looks at the frequency and amounts, the nature of the gifts, who receives them and why. The manual does not set a minimum number of payments or years. It does say a single gift can qualify if it is, or is intended to be, the first of a pattern and there is evidence of that intention. A written note to yourself, or a letter to your parents setting out that you will pay a fixed sum each month, is the kind of evidence that helps.
What 'out of income' means
IHTM14250 says income is your net income after income tax, worked out year by year, and is not necessarily the same as income for income tax purposes. A gift of capital does not qualify. HMRC adds a practical point for people who pay from a current account: you only need to show the gift could have come from income, not trace it to particular pounds. If your salary lands in the same account you send from, and your outgoings leave a surplus, that is usually enough to show.
What your executors will have to show
You do not claim the exemption yourself. After a death, the executors report lifetime gifts on form IHT403, which goes with the main IHT400 account. Question 6 on page 1 asks whether gifts out of income are being claimed, and page 8 holds a year-by-year table. For each tax year in which gifts were made, it asks for:
| Box | What it asks for |
|---|---|
| Box 20: Income | Salary, pensions, interest (including ISAs), investments, rents, annuities (income element), other; minus income tax; net income |
| Box 21: Expenditure | Mortgage, insurance, household bills, Council Tax, travel, entertainment, holidays, nursing home fees, other; total |
| Box 22: Surplus | Net income minus total expenditure for the year |
If the gifts to your parents fit inside the surplus in every year, the claim is easy to make. If no one can reconstruct your income and spending, it becomes hard.
Worked example (illustrative)
Example: Chika's take-home pay after income tax and National Insurance is £39,000 a year. Her own spending (mortgage, bills, travel, a December trip home) comes to £31,000. She sends her parents in Enugu £350 a month, which is £4,200 a year. Her surplus is £39,000 − £31,000 = £8,000, so the £4,200 fits inside it with £3,800 to spare. The payments are regular, from income, and she still lives as usual: on these figures they are a good fit for the exemption. If, in one year, she had paid a lump sum of £15,000 for her father's surgery out of savings, that payment would be from capital and would need another exemption, or would fall under the seven-year rule.
Records to keep, starting now
- Bank statements showing each transfer, its date, amount and recipient.
- A short annual note of your net income and main spending, in the shape of IHT403 boxes 20 to 22.
- A letter or message to your parents stating the regular amount and what it is for, written when the pattern starts.
- Notes of any change in amount and why (a rise in drug costs, a new rent).
- Payslips or P60s for the same years, so the income side can be checked.
- A note in your will file telling your executors that these records exist and where they are.
For help setting the amount itself, see budgeting a monthly allowance for parents and sharing parents' retirement costs between siblings.
Where Pryme fits
A clean trail of regular payments is the evidence this exemption needs. With Pryme you can send money to family in Nigeria on a set pattern, and generate a regular or verifiable statement with VerifyDoc.ai that an executor can rely on as genuine and unaltered. The app shows the rate and the fee before you approve each transfer.
Questions people ask
Is money I send my parents in Nigeria taxed in the UK?
Not when you send it. It is a gift for inheritance tax purposes, and regular payments from income that leave you able to live as usual can be exempt straight away under the normal expenditure out of income exemption.
Is there a limit on gifts out of normal income?
GOV.UK says there is no limit, provided the payments are regular, come from your income and you can afford them after your usual living costs.
Do I need to tell HMRC about the money I send home each month?
Not for inheritance tax while you are alive. Your executors report gifts on IHT403 after your death and claim the exemption then, so keep records of your income, spending and transfers.
What if I paid a big one-off hospital bill for my mother?
A one-off payment from savings is unlikely to be normal expenditure out of income. It may fall within the £3,000 annual exemption or be treated as a gift under the seven-year rule.
Sources
- GOV.UK: Inheritance Tax, gifts · accessed Oct 2026
- HMRC Inheritance Tax Manual IHTM14231: normal expenditure out of income (updated 7 Apr 2026) · accessed Oct 2026
- HMRC Inheritance Tax Manual IHTM14241: meaning of normal expenditure (updated 7 Apr 2026) · accessed Oct 2026
- HMRC Inheritance Tax Manual IHTM14250: gifts out of income (updated 7 Apr 2026) · accessed Oct 2026
- HMRC: IHT403 Gifts and other transfers of value, form (June 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.