1. Dear *****, the liability of your gift to your good friend will last, on a tapering basis, for seven years after the date of the making of your gift. There is a reduction in the level of Inheritance Tax each year over the seven years until there is zero liability after seven years. So, if you live 7 years, your good friend will have no potential liability to Inheritance Tax.
2. Be aware that the headline rate on anything in your estate over GBP 325,000 is 40%. However, there is a proportionate reduction in this rate each year over the seven years.
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