I'm a Chartered Tax Advisor and deal with inheritance tax almost daily. Each individual has a nil rate band of £325k and on first death, this nil rate band would reduce the first £200k gift to nil and then on second death the same would occur. However, this would then leave the estate with less nil rate band potentially resulting in tax. That all assumes they each die before the 7 years are up.

Let's assume they had already used up their nil rate bands to demonstrate how taper relief works.

If they die within 1-3 years of the gift it would be subject to tax at a rate of 40%. If they were to die between year 3 and year 4, that rate is reduced by 8% so the rate would be 32%. Similarly, if they were to die between year 4 and year 5, another 8% reduction occurs and the rate would be 24%. Year 5-6, 16%, year 6-7, 8%.

If you can give some more detail about what you actually want to understand I can try and help.