UK IHT 7-Year Gift Schedule Calculator 2026/27
IHT 7-year gift schedule 2026/27 - taper relief by years survived, how the £325,000 nil-rate band absorbs gifts first, and the annual exemption.
Taper relief schedule
Rate of Inheritance Tax on the part of a gift above the nil-rate band, by years between the gift and the giver's death (IHTA 1984 s.7(4), GOV.UK):
| Years between gift and death | Taper relief | Effective IHT rate |
|---|---|---|
| Less than 3 | 0% | 40% |
| 3 to 4 | 20% | 32% |
| 4 to 5 | 40% | 24% |
| 5 to 6 | 60% | 16% |
| 6 to 7 | 80% | 8% |
| 7 or more | 100% | 0% |
Worked scenarios
Each row is a single outright gift to an individual. It assumes no other gifts in the 7 years before this one, so the full £325,000 nil-rate band is set against the gift first, and that the £3,000 annual exemptions were already used. The tax is payable by the person who received the gift. Whatever nil-rate band the gift uses is no longer available to the rest of the estate.
| Gift | Complete years survived | Above nil-rate band | Taper relief | IHT on the gift |
|---|---|---|---|---|
| £100,000 | 2 | £0 | 0% | £0 |
| £500,000 | 2 | £175,000 | 0% | £70,000 |
| £500,000 | 4 | £175,000 | 40% | £42,000 |
| £500,000 | 6 | £175,000 | 80% | £14,000 |
| £500,000 | 7 | £0 | 100% | £0 |
| £1,000,000 | 3 | £675,000 | 20% | £216,000 |
| £1,000,000 | 5 | £675,000 | 60% | £108,000 |
Use the IHT gift taper calculator for your own figures, or read the full IHT 7-year gift taper guide.
Frequently asked questions
How is taper relief calculated?
Taper relief reduces the tax on a gift, not the value of the gift. If the giver dies less than 3 years after the gift, tax on the part above the nil-rate band is charged at the full 40%. After 3 to 4 years it is charged at 32%, 4 to 5 years 24%, 5 to 6 years 16% and 6 to 7 years 8%. After 7 years there is no tax on the gift (IHTA 1984 s.7(4); GOV.UK Inheritance Tax: gifts).
Does taper relief apply to every gift?
No. Taper relief only reduces tax that is actually due on a gift, and tax is only due if the gifts made in the 7 years before death add up to more than the £325,000 nil-rate band (GOV.UK; HMRC IHTM14611). A gift inside the nil-rate band pays no tax itself, but it uses up nil-rate band that would otherwise have been available to the rest of the estate.
Can I give away a large sum and pay no IHT if I live 7 years?
An outright gift to another individual is a potentially exempt transfer: if you survive 7 years it is exempt. Two common exceptions. If you keep a benefit from the gift (for example, giving away your home but living in it without paying market rent), it is a gift with reservation and counts as part of your estate (Finance Act 1986 s.102). Gifts into most trusts are chargeable lifetime transfers, not potentially exempt transfers, and can be taxed when made.
What is the £3,000 annual exemption?
Each person can give away £3,000 in each tax year free of Inheritance Tax (IHTA 1984 s.19). Gifts within it are exempt straight away and never enter the 7-year count. Any unused part can be carried forward one tax year only, so up to £6,000 if none was used the previous year.
How does the gifts from surplus income exemption work?
Gifts that are part of your normal expenditure, made out of income (not capital) and that leave you with enough income to keep your usual standard of living are exempt straight away, with no 7-year wait (IHTA 1984 s.21). Keep records showing the pattern of gifts and your income and spending, because the executors will need to show the conditions are met.
What are the small gifts and wedding gift exemptions?
You can give up to £250 a tax year to any number of people, as long as the same person has not also had part of your annual exemption (IHTA 1984 s.20). Wedding or civil partnership gifts are exempt up to £5,000 from a parent, £2,500 from a grandparent and £1,000 from anyone else (IHTA 1984 s.22; GOV.UK Inheritance Tax: gifts).