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Gifts and the 7 year rule

2026-27

The gift

Amount givenThe value when it was given. £
Years between the gift and the deathSeven or more and there is nothing to pay.
Earlier gifts in the same seven yearsThey use the nil rate band first, so this gift only reaches what is left. £
Use the annual exemptionOnly if it was not already used that year.

What is owed on it

Tax on the gift £0.00 on this gift
Where it stands—
Gift£0.00
Chargeable£0.00
Nil rate band available£0.00
Taxable£0.00
Rate after taper relief—
Tax£0.00

What taper relief was worth

At the full rate it would be£0.00
Taper relief saved£0.00
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How this is worked out

⚠ Taper relief reduces the tax on a gift, not the gift itself. That one sentence is the whole of what people get wrong about the seven year rule.

⚠ Most gifts get nothing from taper relief

Because most gifts are inside the nil rate band, and there is no tax on them to taper. A gift of £100,000 made five years before death, where the band covers it, is worth exactly the same as one made six years before: nothing to pay either way.

People plan around "the tax falls away after three years" and are disappointed twice — once when they learn there was never any tax to fall away, and once when the gift turns out to have pushed the estate into charge instead. Taper relief only ever helps a gift large enough to exceed the band on its own.

Gifts use the band in date order

The earliest gift in the seven years takes the nil rate band first, then the next, and the estate gets whatever is left. So the tax tends to land on the most recent gift and on the estate — not on the gift that used the band up.

The tax is owed by whoever received the gift

Not by the estate, which is a surprise to almost everyone. If they cannot or will not pay, it falls back to the estate — so a gift can reduce what the other beneficiaries get even though they never saw it.

What this does not cover

Gifts to a spouse, civil partner or charity, which are exempt entirely. The small gifts allowance, wedding gifts, and gifts out of surplus income, which are each exempt on their own terms and are the ones worth using first. Gifts with reservation of benefit — giving away a house and continuing to live in it — which do not leave the estate at all. Trusts, which are chargeable when made. And carrying an unused annual exemption forward one year, which this page does not attempt because it needs the previous year's gifts too.

Where these figures come from

Every figure above is read from a dated rate file rather than written into the page, and each one is checked against the gov.uk page it came from. How these numbers are kept right sets out the whole process.

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