He is allowed to give up to �3,000 in each tax year and if he has not given any last year he can make it �6,000 for this year. There will not be any IHT on these gifts even if he does not live for a full seven years after making the gift.
Any gift over this amount will be a 'Potentially Exempt Transfer' and will not be included in his estate as long as he survives for seven years. He is also allowed to make 'Gifts Out Of Income' which must be regular and given out of his normal income from say his Salary. It must not reduce his standard of living nor be paid from Capital such as a savings account. The point made by Tom Braider about interest being taxed as the parents is correct.