The number of estates falling foul of HMRC’s ‘7 year rule’ for Inheritance Tax (IHT) free gifts has increased year on year between 2015/16 and 2017/18 resulting in a tax bill of £488 million.

The data, acquired from HMRC via a freedom of information request from accountancy firm Saffery Champness, found the number of estates owing tax on gifts has grown 14 percent over the three year period surveyed, representing the latest available data.

The additional tax on gifts now represents a growing proportion of estates’ total IHT liability.

Currently, tax rules allow for certain gifts made by individuals du...