Floating Tap Holder.

[magicniner]

They have to be able to float in all 3 axes but still apply torque to the tap?

No they don't.
Floating tap holders assume the machinist/CAD/CAM Monkey is competent enough to align X and Y and only float in Z, this is to prevent breakage when a machine's Z feed doesn't perfectly match the required movement for the tap to maintain neutral tension.
Floating reamer holder requirements differ

[Will_D]

Ah so! Thanks for clearing this up.

So I will bore out a blank R8 to fit a parrallel shank ER20 holder. Fit a drive pin and spring to bias the holder at 50% of the slot. Then use the square ER20 tapping collets.

Seems like a plan

[magicniner]

Sounds like a plan!
Ensure your materials are hard enough and well lubricated enough to avoid galling, making the pin square with soft corners and using a Moly lube on the sliding areas will help,
Regards,
Nick