The amount of tax payable on a chargeable transfer (including a potentially exempt transfer which becomes chargeable) depends upon the donor's history of transfer-making during the previous seven years.

Example

B makes the following chargeable transfers over a period of 12 years:

Gift (1): £280,000 in year 1

Gift (2): £120,000 in year 7

Gift (3): £250,000 in year 12

Assume 2015-16 rates apply.

Gift (1)

Cumulative total after Gift (1)

£280,000

Tax on £280,000

Nil

Gift (2)

£

Tax on £325,000

Nil

 on balance (£75,000) × 20%

15,000

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