UK IHT 7-Year Gift Schedule Calculator 2026/27
Calculate IHT on lifetime gifts based on years between gift + death. Taper relief reduces IHT (not gift value) from year 3+. NRB £325,000 absorbs first portion.
Taper relief schedule
| Years gift → death | Taper relief | Effective IHT rate |
|---|---|---|
| 0-3 | 0% | 40% |
| 3-4 | 20% | 32% |
| 4-5 | 40% | 24% |
| 5-6 | 60% | 16% |
| 6-7 | 80% | 8% |
| 7+ | 100% | 0% |
Worked scenarios
| Gift | Death year | Above NRB | Taper relief | IHT | Note |
|---|---|---|---|---|---|
| £100,000 | Year 2 | £0 | 0% | £0 | Within NRB - no IHT regardless |
| £500,000 | Year 2 | £175,000 | 0% | £70,000 | Full 40% IHT in year 2 |
| £500,000 | Year 4 | £175,000 | 40% | £42,000 | 40% taper relief on year 4 |
| £500,000 | Year 6 | £175,000 | 80% | £14,000 | 80% taper relief on year 6 |
| £500,000 | Year 7 | £0 | 100% | £0 | 7+ years = fully exempt |
| £1,000,000 | Year 3 | £675,000 | 0% | £270,000 | Large gift, year 3, no taper yet |
| £1,000,000 | Year 5 | £675,000 | 60% | £108,000 | Year 5 = 60% taper |
| £1,000,000 | Year 7 | £0 | 100% | £0 | Year 7+ = fully out of estate |
Frequently asked questions
How is taper relief calculated?
Taper relief reduces IHT on lifetime gifts based on years between gift + death. Year 0-3: no relief (full 40% IHT). Year 3-4: 20% relief = 32% effective. Year 4-5: 40% = 24%. Year 5-6: 60% = 16%. Year 6-7: 80% = 8%. Year 7+: 100% = 0% (fully exempt).
Does taper apply to all gifts?
Only to gifts EXCEEDING £325k NRB. Gifts within NRB pay no IHT regardless, so taper has nothing to reduce.
Can I gift £1m + escape IHT if I live 7 years?
YES - any lifetime PET to individual outside estate if donor survives 7+ years. Subject to GROB rules (continued benefit) + spousal exemption.
What is the £3k annual exemption?
Section 19 IHTA 1984 - £3,000 per donor per tax year given tax-free immediately (not PET). Unused 1-year carry-forward = £6k year 1 if previous unused.
Gifts from surplus income exemption
Section 21 IHTA 1984 - regular gifts from surplus income (after meeting living costs) tax-free immediately. Must be habitual pattern + from income not capital. No 7-year wait.