I'm trying to send money to someone on Paypal, and I've heard that it's free for people in the UK if sending as a personal gift. However, when I try it, it gives me option to pass the charge on to the other person, or to pay the fee myself.

I'm thinking it might be because I have a premier account and not a personal one. Has anyone else in the UK tried to send money as a gift?
I've never heard of this, maybe you're getting confused with import charges which can be waived if the goods are declared "gift"
Ah, I've just figured it out. For a personal transaction to be free, the funding source has to be your bank account, or PayPal credit i.e. not from your credit/debit card.