For the exemption to apply, the person must demonstrate a “regular pattern of giving over a reasonable period of time”. 

On its website, HCR Law said: “There are qualifications to the exemption. Certain types of income cannot be gifted, for example, annuities and insurance bond payouts. Any surplus income must be gifted promptly, otherwise, the income will be considered as capital.”

However, HCR Law added that “successfully claiming the exemption can be complex”. 

With gifting, many Britons can be caught out by the seven year rule which can mean that their loved ones will have to pay tax on the gift they have received.

No tax is due on any gifts a person gives if they live for seven years after giving them, however, if the person dies within the seven years there is a tax to pay.

Gifts given in the three years before the death are taxed at the full 40 percent.