Hundred SummersThe 7-year rule calculator: what a gift really does to your estate
A gift is only outside your estate once 7 years pass, and until then it consumes your nil-rate band first, which is why taper relief usually helps less than people expect. Computed by the same inheritance-tax engine as the full Hundred Summers plan. Your figures never leave your browser.
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Worked example
Computed when this page was built by the same engine that runs the calculator above, so the figures below and the live tool can never disagree. Change any input above to see your own.
| Inputs | |
|---|---|
| Estate now | £600,000 |
| Gift made | £100,000, 2 years ago |
| Late spouse's bands | No |
| Results | |
|---|---|
| IHT if death were today | £148,800 |
| IHT once the gift survives seven years | £110,000 |
| Extra tax the gift causes today | £38,800 |
| Taper relief on it | £0 |
| Years still to run | 5 |
The next question
Will my estate pay inheritance tax? →Inheritance tax calculator
Or answer it with everything else: the full Hundred Summers plan connects your pay, pensions, savings, property, tax and spending year by year, and stress-tests them across 500 simulated market histories.
Read the guides
- The 7-year rule for gifts, and why taper relief disappoints →How Potentially Exempt Transfers really interact with the nil-rate band, why taper relief rarely helps gifts under £325,000, and the exemptions that work immediately, including the underused surplus-income rule.
- Pensions and inheritance tax from April 2027 →The biggest pension rule change in a decade: unused pension pots join the estate for inheritance tax from April 2027; what changes, the double-tax effect after 75, and how it rewrites the 'spend the pension last' doctrine.
How the 7-year clock really works
Gifts to people are Potentially Exempt Transfers: survive seven years and they vanish from your estate entirely. Die sooner and they return, and here is the part most explanations bury: gifts consume the nil-rate band before the rest of your estate does. A £100,000 gift made two years before death doesn't get taxed at 40% itself; it eats £100,000 of your £325,000 band, so the estate pays 40% on £100,000 more than it otherwise would.
Taper relief: real, but narrower than its reputation
From year three, taper relief cuts the tax on the gift itself by 20%, 40%, 60% then 80%. But because smaller gifts carry no tax of their own (the band absorbs them), taper relief only genuinely helps once total gifting exceeds the available nil-rate band. The calculator above applies the real ordering, the £3,000 annual exemption and statutory taper: by running the same calcIHT function the full plan uses, with and without your gift.
The inheritance tax calculator covers the whole estate picture (residence band, spouse transfers, charity rate and the 2027 pension rule), and the full Hundred Summers plan projects your estate and gift clocks year by year.