Gift and 7-year rule calculator
See how much Inheritance Tax would be due on a gift if the person who gave it died within 7 years, after taper relief and exemptions.
Your result appears here as you type.
An estimate from the figures you entered. It is not financial advice.
Taper relief rates
| Years between gift and death | Tax on the gift |
|---|---|
| Less than 3 | 40% |
| 3 to 4 | 32% |
| 4 to 5 | 24% |
| 5 to 6 | 16% |
| 6 to 7 | 8% |
| 7 or more | 0% |
How this is calculated
The calculator takes off any annual exemptions, then sets the gift against what's left of the £325,000 nil-rate band after earlier gifts. The part above the band is taxed at the rate for the number of years since the gift. It assumes the gift is to a person (not a trust) and there's no transferred nil-rate band from a late spouse. The gift still counts against the band when the rest of the estate is taxed, which can raise the estate's bill. The Inheritance Tax calculator shows that side.
Worked example: £400,000 to a son
Joan gives her son £400,000 towards a house and dies five and a half years later. She'd made no other gifts.
- Two annual exemptions: £6,000, leaving £394,000
- Nil-rate band covers £325,000, leaving £69,000
- Full tax would be £27,600, but taper relief at 5 to 6 years cuts the rate to 16%
Her son pays £11,040. Had Joan lived another 18 months, there would be nothing to pay on the gift.
Questions people ask
What is the 7-year rule for gifts?
Most gifts to people are potentially exempt transfers. If the giver lives for 7 years after making the gift, it falls out of their estate for Inheritance Tax. If they die sooner, the gift is added back and may be taxed.
How does taper relief work?
If the giver dies 3 to 7 years after the gift and the gifts are worth more than the £325,000 nil-rate band, the tax on the gift is reduced: 32% for 3 to 4 years, 24% for 4 to 5, 16% for 5 to 6 and 8% for 6 to 7. Under 3 years it’s the full 40%.
How much can I give away tax-free each year?
You can give £3,000 a year in total (and carry one unused year forward), as many £250 gifts per person as you like to people who haven’t had another exemption from you, wedding gifts of up to £5,000 to a child, and regular gifts out of surplus income.
Who pays the tax on a failed gift?
The person who received the gift usually pays any tax due on it. The gift also uses up the nil-rate band first, which can mean more tax for the rest of the estate.
Does taper relief reduce the value of the gift?
No. It reduces the tax on the part of the gift above the nil-rate band. A gift within the nil-rate band has no tax to taper, but it still uses up the band for the estate.
Sources
- Inheritance Tax: gifts (GOV.UK)
- Inheritance Tax (GOV.UK)
Rates and review
Uses rates for the 2026/27 tax year. Figures last checked against the sources on 25 October 2026.
Written by author to be named. Reviewed by qualified reviewer to be named.
See how we calculate and the disclaimer. Spotted a wrong figure? Report a problem.