An IHT relief in connection with PETs. A PET drops out of consideration after 7 years, but death of the donor within that period gives rise to a tax liability. Tapering relief operates to reduce that liability over the 7 year period so that death in the first 3 years attracts no relief, year 4 attracts 20% relief; years 5, 6 and 7, 40%, 60% and 80% respectively. The gift 'drops out' in year 8. A CGT relief which for individuals has replaced indexation relief for the portion of an asset gain since 6th April 1998. The taper applies over a 10 year period and is different for business and non business assets.
Taper relief was introduced into the UK taxation regime with effect from 6 April 1998.Its purpose is similar to indexation, in that it aims to reduce the amount of Capital Gains Tax you have to pay when you sell Shares, to account for the effect of inflation.