The 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.

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.