What is taper relief?
The purpose of taper relief is to reduce the amount of tax you have to pay. Taper relief applies to inheritance tax (IHT) if the donor dies between three and seven years after making a potentially exempt transfer (or transfers) of more than the nil rate band. It applies both to business and non-business assets, although different rules apply for each. Taper relief is calculated on the basis of how long you have held the asset for. Prior to 6 April 2008, taper relief applied to capital gains tax when shares, property or other capital assets were sold, to account for the effect of inflation. This was abolished in the 2008 Budget.
