Written by the TaxTune Editorial Team · Reviewed by our qualified accountants · Updated for 2026
The quick answer Most gifts you make are free of inheritance tax if you live for 7 years after making them. If you die within 7 years, the gift may be taxed, though taper relief reduces the charge after 3 years. Some gifts, such as £3,000 a year and normal gifts out of income, are always exempt.

How the 7 year rule works

  1. Make a gift. Larger gifts are potentially exempt transfers.
  2. Survive 7 years. If you live for 7 years after the gift, it falls out of your estate entirely.
  3. Die within 7 years. The gift is added back to your estate and may be taxed, using the nil rate band first.
  4. Taper relief. If death is between 3 and 7 years after the gift, the tax on it reduces on a sliding scale.

Gifts that are always exempt

  • £3,000 a year. The annual exemption, which can be carried forward one year if unused.
  • Small gifts of up to £250 per person per year.
  • Normal gifts out of income that do not affect your standard of living.
  • Wedding gifts within set limits, and gifts to a spouse or charity.

Thinking about gifting to your family?

Gifting well can save significant inheritance tax, but timing and records matter. TaxTune helps you plan gifts, use every exemption, and keep the evidence HMRC will want.

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We help you use the annual exemptions, structure larger gifts around the 7 year rule, and keep proper records. Fixed fee.

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Frequently asked questions

What is the 7 year rule for gifts?

Most gifts are free of inheritance tax if you live for 7 years after making them. If you die within 7 years, the gift may be taxed, though taper relief reduces the charge after 3 years.

How much can I gift tax free each year?

You have a £3,000 annual exemption, which can be carried forward one year if unused, plus small gifts of up to £250 per person and normal gifts out of surplus income.

What is taper relief?

If you die between 3 and 7 years after making a large gift, taper relief reduces the inheritance tax due on that gift on a sliding scale, though it only applies once the gift exceeds the nil rate band.

Are gifts to my spouse taxed?

No. Gifts between spouses and civil partners are normally exempt from inheritance tax, as are gifts to charity.

Do I need to keep records of gifts?

Yes. Keeping a clear record of what you gave, to whom and when, and evidence that regular gifts came from income, makes it far easier for your executors to settle the estate correctly.