Weddings are both a time of celebrating, where a beautiful couple decide to make a declaration to each other that they will stick together through thick and thin. And the declaration is in front of friends and family (and sometimes colleagues) and published appropriately. Being married creates a contract that is witnessed before numerous people, which is as much kept by the parties to it, as it is sheltered by social norms.
A more jaded person might think that any time between May and September is wedding season, and judge just how expensive a wedding might be. Not only for the nuptial pair, but for all the rest. How many times can you wear that wedding hat? And can you really afford to attend seven weddings in a year, where the gift list ranges from the Denby cups and saucers through to the Villeroy & Boch and all the way through to the very best of wedding ranges on offer. Being a guest at a wedding can involve an outlay from £100 through to many thousands. The wedding lists can be enormously revealing – how can the happy couple expect to manage without silver napkin rings from Tiffany ? At what point does a gift become just the price tag for entry, the tribute to be rendered?
In ancient times, of course, the wedding of two people was the moment when they set up house together for the first time, when they left the home of their parents. In more recent centuries, a couple would have to work towards their “bottom drawer” of items for the new home. Making quilts for the bed was part of the way that friends and relatives could make a contribution, if you came from humbler stock, and wanted to wish the new couple well. Perhaps in previous decades even, the items commonly bought for the happy day was limited by the technology available – the automatic pop-up toaster was not patented until 1919, and so cannot have featured before then – the microwave, breadmaker, smoothie maker, vacuum cleaner, fridge, freezer, and electronic food processor also being recent inventions.
What might have been more important in those times would be the financial security of the couple – perhaps in a time when marriages left one party more financially vulnerable than the other. Marriage settlements safeguarding the assets of the female party were common amongst those who had significant assets to preserve.
Inheritance Tax legislation has existed in many guises, and has preserved a special category of gifts for the wedding event, but some might think that the allowances given do not reflect the size of gifts that are expected (moneysavingexpert
reported the average price of a wedding as £20,000 for this year)
These specific gifts are called those in contemplation of marriage, defined in section 22 IHTA:
- a parent of a child to the marriage may give £5000
- a grandparent or remoter ancestor £2500
- a party to the marriage, £2,500
- If you are not related to the parties getting married, £1000
When it comes down to what counts as a gift for this exemption, then clearly, proving retrospectively that a gift is made in this way requires a nexus between the event and the gift that is reasonable. For example, the delivery of presents to the home of the bride and groom two weeks after the event would be in contemplation of the marriage, on the basis that the event can clearly be tied to the item transferred. However, the gift of a cheque that did not clear the bank until three months after the marriage might not – as it might be unclear that this was a gift made for the marriage. The payment of the invoice for the cake might be closely connected with the wedding as to form part of a wedding-gift. Payment for a late honeymoon trip might not, if it cannot be distinguished from an ordinary holiday.
To err on the side of safety, all cheques to the couple should probably be presented and have cleared by the date of the wedding or civil partnership. You might keep a record of your gift card to the happy couple for later reference.
If you spend more than £5000 on your son’s civil partnership, as one of the more honoured guests, you might have to use your annual exemption for gifts (ss19 IHTA) to the total. This could give you up to £6,000, if you did not use the previous year’s allowance. As this allowance relates to you as an individual, then potentially there might be four parents with their allowances intact.