Inheritance tax taper relief reduces the tax due on a gift made three to seven years before death, on a sliding scale, so the longer you survive after giving, the less tax the recipient pays. It reduces the tax, never the value of the gift, and it only bites where your gifts in those seven years exceed the £325,000 nil-rate band.
What is inheritance tax taper relief?
Taper relief is a reduction in the inheritance tax charged on a lifetime gift when the person who made it dies between three and seven years later. Most gifts leave your estate entirely once you survive seven years. Die inside seven years and the gift is added back, but if it is taxable, taper relief cuts the tax on a scale that rises with each year you live past the third.
The relief applies to the tax, not the gift. A £400,000 gift is still counted as £400,000 against your estate; taper only softens the tax bill that follows. It also applies only to the part of a gift that is actually taxed, which for most people is nothing.
What is the taper relief scale?
The scale runs from the third to the seventh year after a gift. Nothing is tapered in the first three years, so a gift taxed at all in that window is taxed at the full 40%. From year three the rate on the taxable part of the gift steps down each year, reaching zero once seven full years have passed.
| Years between gift and death | Taper applied | Effective rate on the taxable gift |
|---|---|---|
| Less than 3 years | None | 40% |
| 3 to 4 years | 20% reduction | 32% |
| 4 to 5 years | 40% reduction | 24% |
| 5 to 6 years | 60% reduction | 16% |
| 6 to 7 years | 80% reduction | 8% |
| 7 years or more | Gift falls out of the estate | 0% |
Source: gov.uk, Inheritance Tax on gifts, as at August 2026, subject to change.
When does taper relief actually apply?
Taper relief applies only when two things are both true: you die three to seven years after the gift, and your total gifts in the seven years before death are more than the £325,000 nil-rate band. The band is set against your gifts first, in date order, and only the excess is taxed. Where gifts stay under £325,000, there is no tax, so there is nothing for taper to reduce.
This is why taper helps far fewer people than the scale suggests. The recipient of the gift is the one liable for any tax on it. The nil-rate band is frozen at £325,000 until 5 April 2031 (gov.uk, as at August 2026, subject to change), so larger gifts are the ones where taper starts to matter. Our inheritance tax overview sets out how the bands fit together.
A worked example of taper relief
This shows taper on a gift large enough to be taxed. Margaret gives her son £500,000, has made no earlier gifts, and dies five years and six months later. The figures are illustrative and every estate differs, but the steps are the ones HM Revenue and Customs follows.
- Set the nil-rate band against the gift: £500,000 less £325,000 leaves £175,000 taxable.
- Work out the full tax: £175,000 at 40% is £70,000.
- Find the taper: death falls in the 5 to 6 year band, a 60% reduction, so 40% of the full tax remains.
- Apply it: £70,000 at 40% gives £28,000 of tax payable by her son.
Had Margaret survived the full seven years, the £500,000 would have left her estate entirely and the tax would have been nil. Taper saved £42,000 against the £70,000 that would have applied in the first three years.
The mistake people make with taper relief
The common mistake is reading the scale as though the gift itself shrinks each year, then expecting a saving that never arrives. Taper reduces tax, and there is only tax once cumulative gifts pass £325,000. A single £200,000 gift carries no inheritance tax whether death comes in year two or year six, because the nil-rate band covers it and there is nothing to taper.
In practice this trips up people who gift a modest sum and count the years hoping the bill falls. Below the band, the years make no difference. Above it, taper is real but partial, and pairing gifts with the annual and regular-income exemptions usually does more. Our guides on tax-free gifting and wider inheritance tax planning set out how they fit together.
Frequently asked questions
These are the questions we are asked most about taper relief. Each answer reflects the law of England and Wales, current to the November 2025 Budget, and describes general rules rather than advice on your own estate. Where your gifts or circumstances are unusual, the position can differ, so treat these as a starting point.
Does taper relief reduce the gift or the tax?
Taper relief reduces the inheritance tax due on a gift, not the value of the gift. The gift is still counted in full against your estate, and only the tax that would otherwise be payable is reduced on the sliding scale, and only for gifts made three to seven years before death (gov.uk, as at August 2026, subject to change).
Does taper relief apply if the gift is under £325,000?
Usually not. Taper relief only reduces tax that is actually due, and no tax arises until your gifts in the seven years before death exceed the £325,000 nil-rate band. If your total gifts stay below that band, there is no tax to taper, so surviving four or five years makes no difference to the bill.
How many years must you survive for full relief?
Seven years. Survive seven full years after making a gift and it falls out of your estate completely, with no inheritance tax and no need for taper. Between three and seven years, taper reduces the tax in steps; within three years, any tax due is charged at the full 40% (gov.uk, as at August 2026, subject to change).