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What is the 7 year rule for inheritance?

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During your lifetime you can make gifts and, if you make a gift which exceeds your annual allowances, the value of the gift can come back into your estate for tax purposes. You are allowed to gift £3,000 per year so if for example, Emily gifts £7,000 to Tim, if Emily dies within 3 years of that gift, the £4,000 will be included in Emily’s estate for tax purposes.

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