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Not all of them. IHT403 is the schedule for gifts the deceased made on or after 18 March 1986, and HMRC is specific about what to leave out: “Do not tell us about any gifts where the total value was £3,000 or less in any tax year, small amounts of £250 or less or if the gifts were made to a spouse or civil partner.” Everything else in that window belongs on the form, exempt or not, with the exemption stated. This guide explains which gifts must be declared, which are genuinely exempt, how to find gifts in the estate records, and what happens if a gift is missed. For background on the 7-year rule itself, see our detailed guide to the 7-year gifting rule and inheritance tax.
Gifts to individuals made more than 7 years before death are outside the estate for IHT purposes. The main exception is a gift with reservation of benefit, which stays in the estate however long ago it was made. HMRC also asks separately, on page 5 of IHT403, about certain chargeable gifts made before the 7-year window — those are not added to the estate, but they are used to work out the tax on the later gifts.
The 7-year period runs from the date of the gift to the date of death. A gift made on 1 April 2019 falls inside the 7-year period for someone who died on 31 March 2026, because the seven years are not yet up, and outside it for someone who died on 2 April 2026.
Where a gift falls in this 7-year window, it is treated as a "potentially exempt transfer" (PET) if made to an individual, or a "chargeable lifetime transfer" (CLT) if made to certain types of trust.
A PET is a gift from the deceased to an individual — a family member, friend, or anyone else who is not a trust. PETs become fully exempt if the deceased survived for 7 years after making the gift. If the deceased died within 7 years, the PET may be taxable:
The gifts are set against the nil rate band first, in the order they were made. Only once the gifts in the 7 years before death exceed the available nil rate band is there any tax on a gift at all. GOV.UK puts the same point this way: “Taper relief only applies if the total value of gifts made in the 7 years before you die is over the £325,000 tax-free threshold.”
Taper relief is the most inverted rule in UK inheritance tax. It reduces the tax on the gift, not the value of the gift, and it only bites where there is tax on the gift in the first place. IHT403 states both conditions: taper relief “is only available on the tax on gifts that both” have “a combined value that is more than the Inheritance Tax nil rate band available for the estate” and “are made between 3 and 7 years before the date of death”. A £20,000 gift four years before death, in an estate whose nil rate band is not used up by gifts, gets no taper relief — because there is no tax on it to relieve.
You also do not calculate it yourself. The form says: “Do not deduct Taper Relief on this form… If tax is due on the gifts HMRC will send you separate calculations and include any Taper Relief due.”
Who pays the tax on a gift. IHT403 is explicit that this is not the estate's bill in the first instance: “If Inheritance Tax is due on any of the gifts, the people who received them are liable to pay the tax due on them. This is separate from the Inheritance Tax that may be due on the estate. A year after the date of death, the executors or administrators of the deceased's estate become jointly liable for the tax on the gifts.”
A CLT is a gift to a discretionary trust (or certain other types of trust). Unlike PETs, CLTs are immediately chargeable to IHT at the time they are made (at the lifetime rate of 20%, with a further charge at death if the donor dies within 7 years). A CLT made in the 7 years before death goes on pages 3 and 4 of IHT403 with the other gifts, and uses up part of the nil rate band.
Chargeable gifts made before that window are not ignored either. Page 5 of IHT403 is for “earlier transfers”, and HMRC's notes explain why: to work out the tax on a gift, “the law says that we must add it to any chargeable gifts made in the 7 years before the gift concerned”. So a chargeable gift made 12 years before the death can still affect the tax on a gift made 6 years before it. HMRC is equally clear that these earlier gifts are not added to the estate: “You should not include these earlier gifts with the estate on death because they are only relevant in working out tax payable on gifts.” Gifts from one individual to another are not chargeable gifts and do not go in that section.
Some gifts do not count as chargeable transfers at all. HMRC's IHT400 notes say you can tick ‘No’ at box 30 and skip IHT403 entirely if the only gifts the deceased made were: to a spouse or civil partner where the exemption applies; outright gifts to an individual not exceeding £250 in a year; outright gifts of money or listed stocks and shares wholly covered by the annual exemption; or outright gifts made regularly from income where the total did not exceed £3,000 in each year. Keep your own record of them either way, in case HMRC asks:
Each person can give away up to £3,000 per tax year free from IHT. Any unused annual exemption from the previous year can be carried forward, giving a maximum of £6,000 in one year if the previous year's allowance was unused. The annual exemption covers gifts to one or more people — you can split £3,000 however you choose.
GOV.UK: “You can give as many gifts of up to £250 per person as you want each tax year, as long as you have not used another allowance on the same person.” The small gift allowance is the one that cannot be combined — a wedding gift allowance, by contrast, can be combined with any other allowance except this one.
Gifts on the occasion of a wedding or civil partnership are exempt up to the limits GOV.UK sets out: “£5,000 to a child; £2,500 to a grandchild or great-grandchild; £1,000 to any other person”. A gift from one party to the marriage or civil partnership to the other is also covered up to £2,500. The gift must be made on or shortly before the ceremony.
Regular gifts made from income (not capital) are exempt if they form part of a normal pattern of expenditure and do not reduce the donor's standard of living. This exemption can be highly valuable — regular standing-order payments to children, for example, or regular premium payments on a life insurance policy for a beneficiary. Evidence of the pattern and income source is essential to support this exemption. For more detail on how life insurance is treated, see our guide to life insurance and estate/probate.
Payments for the maintenance of a spouse, civil partner, former spouse, dependent relative, or child in full-time education are exempt, provided they are reasonable and genuinely for maintenance purposes.
Gifts between spouses and civil partners are normally fully exempt. There is one cap, and its basis changed on 6 April 2025. HMRC's IHT402 notes put the current rule this way: from 6 April 2025 “There is no limit to spouse exemption unless the deceased was a long-term UK resident and the surviving spouse was not a long-term UK resident, when it is limited to the Inheritance Tax nil rate band” — £325,000. Before 6 April 2025 the same cap ran off domicile rather than long-term residence, and before 6 April 2013 it was fixed at £55,000.
Gifts to UK-registered charities are fully exempt from IHT, regardless of their value or when they were made.
The definition of a gift for IHT purposes is broader than many executors expect. The following all count as gifts and may need to be declared:
This is one of the most important concepts in IHT gift rules, and one that catches many executors off guard. If the deceased gave away an asset but continued to benefit from it, the gift is treated as still being in the estate at death — regardless of when the gift was made. The 7-year rule does not apply to gifts with reservation.
The most common example is where a parent transfers their home to their children but continues to live there rent-free. Despite the legal transfer, the property is still treated as part of the estate for IHT purposes at full open market value at the date of death.
Other examples include:
To escape the reservation of benefit rules, the donor must either give up the benefit entirely or pay full market-rate consideration for continuing to use the asset.
Gifts are declared on form IHT403 ("Gifts and other transfers of value"), which is a supplementary schedule to the IHT400. For each gift you should record:
The column headings themselves carry the warning: “do not deduct Taper Relief here”.
If the estate qualifies as an "excepted estate" (broadly, no IHT to pay and within the simplified reporting thresholds), a full IHT400 may not be required — but gifts with reservation of benefit must still be reported, as they affect whether the estate qualifies as excepted at all.
Finding gifts takes detective work. Do not rely solely on what family members volunteer — some recipients may not realise they need to disclose a gift, or may prefer not to. As executor, you have a legal duty to make thorough enquiries.
During a compliance check, HMRC routinely requests 7 years of bank statements for all accounts held by the deceased. If those statements show large transfers that do not appear on IHT403, HMRC will ask for an explanation. This is why it is essential to review statements proactively and declare gifts accurately — not to wait for HMRC to find them first.
If you discover after submitting IHT400 that a gift was not declared, tell HMRC as soon as possible — form C4, ‘Corrective account’, in England, Wales and Northern Ireland, or form C4(S), ‘Corrective Inventory and Account’, in Scotland. If the missed gift increases the taxable estate, additional IHT and interest will be due. Penalties under Schedule 24 to the Finance Act 2007 are capped at 30% of the tax lost for a careless inaccuracy, 70% for a deliberate one and 100% where it is deliberate and concealed, and the range within each band turns on the quality of the disclosure — unprompted disclosure attracts the lowest figure.
For a full explanation of the correction process, see our guides on what happens if you make a mistake on your probate application and how to avoid an HMRC probate investigation.
Gifts to individuals made more than 7 years before death are outside the IHT estate. Two things still reach back further. Gifts with reservation of benefit remain in the estate however long ago they were made — questions 8 and 9 of IHT403 ask about transfers made at any point after 18 March 1986. And chargeable gifts made before the 7-year window go on page 5 as ‘earlier transfers’, because they affect the tax on the later gifts, though they are not added to the estate itself.
You must make reasonable enquiries. Review bank statements, ask family members, and check Land Registry records. If after thorough enquiry you have found no evidence of gifts, you can state this on IHT403. HMRC understands that executors cannot know everything about a deceased person's financial history — provided you have made genuine efforts to find out.
Usually yes, with named exceptions. HMRC tells you not to list gifts totalling £3,000 or less in a tax year, amounts of £250 or less, or gifts to a spouse or civil partner covered by the exemption. Beyond those, declare the gift and state the exemption you are claiming in the ‘type of exemption or relief’ column — that is far better than omitting it and leaving HMRC to wonder why it was not disclosed.
As executor, you have a legal duty to submit an accurate and complete IHT return. You must declare gifts you are aware of, even if the recipient objects. If you knowingly omit a gift to appease a beneficiary, you expose yourself to personal liability for penalties and the additional IHT that HMRC would have charged.
A genuine loan with an expectation of repayment is an asset of the estate — money owed to it — not a gift, and the balance outstanding at death is included in the estate value. Where the loan was interest-free and repayable on demand, HMRC's manual says it is not a transfer of value, but that the interest foregone is a gift. If the loan was formally waived before death, the balance at the date of the waiver is a gift made on that date.