Glossary - Seven-year rule
Description
The 7 year rule is an inheritance tax principle under which gifts made during a person’s lifetime may become exempt from inheritance tax if the donor survives for seven years after making the gift. If the donor dies within seven years, the gift may be taxable, with the potential for reduced tax due to taper relief after three years.
Alternate Names
- Potentially exempt transfer (PET)
- Taper relief
- Inheritance tax (IHT)
- Chargeable transfer
- Nil rate band
- Lifetime gifts
