How lifetime gifts can undermine taper relief and estate planning

As all advisers are aware, lifetime gifts, or potentially exempt transfers (PETs), are a well-known estate planning tool. Provided the donor survives for seven years, the gift becomes exempt from IHT. If they die within that period, however, the gift becomes chargeable with the possibility of taper relief reducing the IHT liability if death occurs more than three years after the gift. So far, all familiar. However, there's a potential trap buried in the taper relief rules, a trap that is understood by many in respect of the interaction of an individual's available nil rate band (NRB)....