On an individual's death, the value of his estate will be cumulated with all lifetime chargeable transfers (including potentially exempt transfers which have become chargeable) within the seven years prior to death. Tax is then charged on the estate as if it were the highest part of the total.

Example

E dies on 1 February 2022, leaving a chargeable estate of £460,000. He had made one chargeable gift of £240,000, five years before death.

Tax on E's estate

£

Lifetime cumulative total

240,000

Value of estate

460,000

700,000

     

Tax on total

£

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