The Ledger 6 of 6
Pass on
Inheritance, gifting, and what actually survives a handover.
5 sourced figuresnext checked 1 March 20271 piece
Most family money does not survive the transfer, and the reasons are rarely about tax. But tax is the part with rules you can read, so it is the part we can write about precisely: what the bands are, what gifts fall out of the estate and when, and what the taper genuinely does.
What this is not
Estate planning is a regulated activity and is specific to a family. This is background reading before that conversation, not a substitute for it.
The figures underneath
What this subject rests on
The inheritance tax nil-rate band, and the rates above it.
£325,000, then 40% — or 36% where at least 10% of the net estate goes to charity
GOV.UK · 2026 to 2027 tax year · checked again by 2027-03-01
The additional allowance when a home passes to direct descendants.
Up to £175,000
GOV.UK · Unchanged since the 2020 to 2021 tax year · checked again by 2027-03-01
Reduced by £1 for every £2 an estate is worth above the £2 million taper threshold.
Gifts you can make each year that leave your estate immediately.
£3,000 a year, and one unused year can be carried forward
GOV.UK, Inheritance Tax gifts · Current rules · checked again by 2027-03-01
Small gift and wedding gift exemptions.
£250 per person per year; weddings £5,000 to a child, £2,500 to a grandchild, £1,000 to anyone else
GOV.UK, Inheritance Tax gifts · Current rules · checked again by 2027-03-01
The £250 cannot be combined with another allowance for the same person.
How tax on a gift falls away over seven years.
Within 3 years 40%, 3 to 4 years 32%, 4 to 5 years 24%, 5 to 6 years 16%, 6 to 7 years 8%, then nothing
GOV.UK, Inheritance Tax gifts · Current rules · checked again by 2027-03-01
Taper relief only applies where gifts made in the seven years before death exceed the £325,000 threshold. It reduces tax on the gift, not the value of the gift.
Written so far
What is generational wealth?
What it means to pass something on in Britain, what the rules actually say, and why most family money does not survive the handover.
4 min readAwaiting review
The Swealth letter
One letter a week, on Thursday
Plain writing about British money, and the UK Wealth Blueprint to start with.