I'm planning to use gifting out of surplus income to mitigate inheritance tax, but I need to understand how this works.

Here, Telegraph Money explains how to use unlimited gifting to slash your IHT bill. Jump to: What is the gifts out of surplus ...

Birthday and Christmas gifts made from regular income are also exempt ... gifts do not diminish their quality of life and the money comes out of income, not capital (such as savings or investments).

Rules and reporting requirements depend on whether the cash is income or a gift, how much money changes hands and if you're ...