The answer is simple: now. From the very first gift you make. Not when you think your estate might be taxable, not when you start worrying about inheritance tax, and not when your health begins to decline. Now.
Why timing matters so much
The seven-year rule means that any significant gift you make today could still be relevant to your estate in seven years' time. That relevance doesn't announce itself — there's no reminder, no trigger, nothing to prompt you to dig out the details. By the time the gift matters, you may not be able to remember it clearly, and the people who need to know about it may have to work it out from incomplete records.
The best time to record a gift is the day you make it, when every detail — the date, the amount, the recipient, the reason — is fresh and accurate.
What your executors are required to do
When someone dies, their executors are legally required to report all gifts made in the seven years before death to HMRC, as part of the probate process. They need to complete HMRC's IHT400 form and supporting schedules, which ask for the date, value, and recipient of every gift above the small gifts exemption.
If you haven't kept records, your executors will have to try to reconstruct them. That means going through bank statements, contacting family members, and making educated guesses — none of which is reliable, and all of which takes time during an already difficult period.
The problem with "I'll do it later"
Most people intend to keep records at some point. The difficulty is that gifts are easy to overlook at the time — a bank transfer to help a child with a deposit, a cheque at Christmas, a cash contribution to a grandchild's school fees. Each one seems small and memorable in the moment. Collectively, over years, they become a pattern that is almost impossible to reconstruct accurately.
Waiting until later also creates a specific risk: if you become seriously ill, you may not be able to recall or document gifts clearly. And if you die without records, the burden falls entirely on the people dealing with your estate.
Start your gift record today — it takes two minutes
EverLedge makes it easy to log each gift as you make it, with everything your executors will need stored securely in one place.
What a good gift record looks like
You don't need anything complicated. For each gift, record:
- Date — the exact date the gift was made
- Amount or value — the cash value, or a description and valuation for assets
- Recipient — their full name and relationship to you
- Exemption claimed — annual exemption, wedding gift, surplus income, or none
- Notes — any relevant context, such as the purpose of the gift
That's it. Five fields per gift, recorded at the time. It takes less than a minute, and it can save your executors hours — and potentially prevent disputes with HMRC.
In short
- Start recording gifts from the very first one you make.
- The day of the gift is the best time — every detail is accurate and fresh.
- Your executors are legally required to report seven years of gifts to HMRC.
- A simple record — date, amount, recipient, exemption — is all that's needed.
- Leaving it until later is the single most common mistake people make with estate planning.
This article is general information about UK inheritance tax and is not personal or legal advice. Rules and thresholds can change. Consider speaking to a qualified adviser about your own circumstances.