Gift taper relief calculator

How to use it

• Enter the loss to the donor’s estate when the outright gift was made, after deducting any exemptions. This can differ from the market value of the asset given away.
• Enter the chargeable value of earlier transfers in the seven years before this gift, after exemptions and reliefs. Include earlier outright gifts only if the donor also died within seven years of them. Earlier immediately chargeable transfers, such as transfers into trust, can still count even if made more than seven years before death. The look-back can therefore reach almost fourteen years before death. Do not include later gifts.
• Choose how long the person lived after making the gift.
• If the donor was a surviving spouse or civil partner when they died, enter the percentage of their late spouse’s or civil partner’s nil-rate band available to transfer. Their spouse or civil partner need not have died before this gift was made. Enter 0 if none transfers, or if you do not know.

The thing almost everyone gets wrong

Taper relief reduces the tax, not the value of the gift. People often assume that after four years only part of the gift counts. It does not work that way. The full gift is still measured against the nil-rate band; what tapers is the rate of tax applied to the excess.

The second common misunderstanding is that taper relief applies to every gift. It does not. If the gift and everything before it fits inside the nil-rate band, £325,000 (2026/27) or up to £650,000 where a late spouse's band transfers, there is no tax to taper, and the relief is irrelevant.

The rates

If the death falls exactly on an anniversary of the gift, HMRC's guidance treats the gift as made in the following year, so a death exactly four years after the gift is given the 4 to 5 year rate of 24%. That guidance, and its worked example of a gift on 6 July 2013 and a death on 6 July 2017, is at GOV.UK: work out Inheritance Tax due on gifts. Read literally, IHTA 1984 s.7(4)(a) would give 32% on the same facts. The dropdown does not apply the guidance for you, so where a date falls exactly on an anniversary, choose the later band and speak to us before relying on the figure.

Earlier gifts use the band first

Gifts are set against the nil-rate band in the order they were made. That means an earlier gift can push a later one into charge even though the later one looks modest on its own.

A £200,000 gift with nothing before it sits inside the band and carries no tax. The same £200,000 gift made after an earlier £250,000 gift has £125,000 above the band, and at 40% that is £50,000 of tax. The gift did not change; what changed is what came before it.

A surviving spouse may have a bigger band

Where a husband, wife or civil partner died first without using all of their nil-rate band, a claim can increase the survivor's band by the unused percentage, up to 100%. On the survivor's death the band available can therefore be as much as £650,000 (2026/27) rather than £325,000.

That changes the answer here, not just on the estate. Tax is attributable to lifetime gifts only if the gifts exceed the increased band, so where they fall below it there is no tax on the gift and no taper relief to apply. Authority: HMRC IHTM14611, IHTA 1984 s.8A.

A gift within the band is not free of consequence

Where the death comes within seven years of the gift, a gift that carries no tax itself still uses up nil-rate band. That band is then unavailable to the rest of the estate on death, so the tax can simply move rather than disappear. Survive the seven years and that stops being true: the gift is exempt, drops out of the running total and uses no band at all. Whether a gift saves anything depends on surviving the seven years, not on the gift being under the threshold.

Frequently asked questions

This is an estimate for general information, not advice. Your position depends on your circumstances. Speak to us before acting.