IHTM14612 - Lifetime transfers: specific lifetime reliefs: taper relief: quantifying the relief

The amount of the taper relief depends on the length of time by which the deceased survived the transfer. Allow a reduction of the charge to tax on the transfer by charging the following percentages of the full rate (years in the table below mean calendar years, not tax years).

Years between transfer and death	Percentage of full tax rate
3 to 4	80
4 to 5	60
5 to 6	40
6 to 7	20

Example

Julia makes a gift of £375,000 on 1 February 2009. She dies on 20 June 2012.

£50,000 of the gift exceeds the £325,000 nil rate band.

Full rate of tax on the gift: 40% × £50,000 = £20,000

The gift is within 3 to 4 years of the death, so taper relief allows you to charge tax at 80% of the full rate.

Revised tax charge: £20,000 × 80% = £16,000 (the relief is £4,000).