It’s one of the best-known inheritance tax rules. Everyone has a £325,000 allowance – called the nil-rate band – that can be passed on free of inheritance tax (IHT). In fact the quirk in the taper relief means the total tax bill is thousands more. That means the remainder of the gift to John’s niece – £275,000 – then benefits from the 16 per cent taper relief rate of tax. For example, everyone gets a £3,000 gift allowance every tax year that is exempt from their estate.

Source: Daily Mail March 18, 2026 21:22 UTC