Tax year2026/27SourceGOV.UKConfirmed5 September 2026
Work out the inheritance tax due on a gift made within seven years of death, with taper relief applied at the 2026/27 rates, and see what would change the figure.
Key points
Taper relief reduces the tax on a gift, not the value of the gift.
It only applies once gifts exceed the £325,000 nil-rate band (2026/27), or up to £650,000 where a late spouse's or civil partner's unused band transfers.
A gift the donor survived by seven years is exempt and uses none of the band.
How to use it
Enter the value of the gift when it was made.
Enter any other gifts made in the seven years before it. These matter because they use up the nil-rate band first. Leave out any gift made more than seven years before the death: the donor survived that one, so it is exempt and never counts.
Choose how long the person lived after making the gift.
If the person who made the gift had already been widowed or lost a civil partner, enter the percentage of that earlier nil-rate band left unused. Enter 0 if none transfers, or if you do not know.
Work out the tax on a gift
Inheritance Tax · The 7 Year Rule
What tax is due on a gift made within seven years?
Taper relief is widely misunderstood. It reduces the tax on a gift, not the value of the gift, and it only bites once gifts have used up the nil-rate band. Enter the figures to see what is actually due. Free, and no email required.
Rates from GOV.UK: inheritance tax on gifts. The nil-rate band is £325,000 (2026/27), frozen to 5 April 2031. A claim can increase it by the percentage a late spouse or civil partner left unused, up to 100%, so the band can reach £650,000 (2026/27): see GOV.UK: transferring unused basic threshold. Not modelled: the annual £3,000 exemption (2026/27), small gifts, gifts on marriage, gifts out of surplus income, gifts to charity and gifts to a spouse or civil partner (exempt, subject to a limit where the recipient is not a long-term UK resident: IHTA 1984 s.18), business or agricultural relief, gifts with reservation of benefit, gifts into trust and their charges, fall in value relief, and the residence nil-rate band (which is not available against lifetime gifts). This is an estimate for general information, not advice. Your position depends on your circumstances. Speak to us before acting.
Figures checked 5 September 2026.
The 2026/27 figures this calculator uses
The nil-rate band is £325,000 for 2026/27 and is frozen until 5 April 2031, so the amount a person can give away or leave before inheritance tax applies has not moved since 2009.
Figure
2026/27
2025/26
Nil-rate band
£325,000
£325,000
Residence nil-rate band
£175,000
£175,000
Residence nil-rate band taper starts
£2,000,000
£2,000,000
Inheritance tax rate
40%
40%
Reduced rate where 10% or more of the estate goes to charity
36%
36%
Source: GOV.UK, inheritance tax thresholds and inheritance tax on gifts. Confirmed 5 September 2026. The bands are frozen to 5 April 2031 by Budget 2025. The taper rates on gifts are in the table under The rates, below.
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
Years between gift and death
Rate on the excess (2026/27)
Less than 3
40%
3 to 4
32%
4 to 5
24%
5 to 6
16%
6 to 7
8%
7 or more
Nil
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
Primarily the person who received it. If they do not pay, the liability can fall on the estate, which is why recipients of large gifts are sometimes surprised years later.
It is real and useful, and this calculator does not apply it. Each person can give away £3,000 a year (2026/27) free of inheritance tax, and one unused year can be carried forward. Small gifts of up to £250 per person (2026/27) and gifts on marriage have their own exemptions.
Regular gifts made out of surplus income, which do not reduce your standard of living, can be exempt immediately. The conditions are specific and the records matter, so it is worth setting that up properly rather than claiming it after the event.
Not if you carry on living in it rent free. That is a gift with reservation of benefit and the property stays in the estate. This is one of the most common planning mistakes.
Enter 0 unless the person who made the gift had already been widowed or lost a civil partner. Where that earlier death left part of the band unused, the unused percentage can be claimed and it increases the survivor's band, up to 100%, so the band can reach £650,000 (2026/27). The percentage is worked out on the threshold in force at the first death. How the claim is made depends on the estate: where a full account is needed it goes on form IHT402 with the IHT400, and for deaths on or after 1 January 2022 in an excepted estate you claim when you apply for probate, which in Scotland means form C1. The period for claiming is two years from the end of the month in which the survivor died, or three months from when the personal representatives first act if that ends later, and an officer of HMRC can allow longer (IHTA 1984 s.8B). If you do not know the percentage, leave it at 0: the figure the calculator gives you will then be the higher of the two possibilities, not the lower.
This is an estimate for general information, not advice. Your position depends on your circumstances. Speak to us before acting.
