What is the 3-year rule for a deceased estate?

The “3-year rule” in the UK generally refers to inheritance tax (IHT) on gifts made before death. If the person who died gave away money, property, or assets within three years before they passed away, the full value of those gifts may still be subject to IHT. If the gift was made more than three years but less than seven years before death, a sliding scale of tax (called taper relief) applies. This rule is designed to prevent people from giving away assets shortly before death to avoid paying tax. Executors must declare such gifts to HMRC when applying for probate. Planning ahead with professional advice can help minimise tax liabilities and protect your estate for your beneficiaries.