jUST CURIOUSITY - GIFTS SEVEN YEARS.

by **willpurry** on Sun Jan 22, 2012 5:39 pm

When IHT is payable on gifts in the seven years before death, how are those 7 years defined?

Example - someone dies on the 11/10/11. Do the seven years begin on the 11/10/04, with all gifts before that date being exempt?

by **pawncob** on Sun Jan 22, 2012 9:31 pm

Seven years from the date of the gift.
http://www.hmrc.gov.uk/inheritancetax/how-to-value-estate/gifts.htm#4

by **maths** on Mon Jan 23, 2012 2:43 pm

When IHT is payable on gifts in the seven years before death, how are those 7 years defined?

Example - someone dies on the 11/10/11. Do the seven years begin on the 11/10/04, with all gifts before that date being exempt?

A potentially exempt transfer is subject to IHT if death occurs within 7 years (ie less than) of the date of the gift.

The legislation actually provides that a PET is exempt from IHT if the gift is made "7 years or more before the death of the transferor".

If death occurred on 11/10/11 I would suggest that gifts made on or before 11/10/04 would be exempt.

Year 1 begins on 11/10/04 and ends on 10/10/05; year 2 ends on 10/10/06 and year 7 ends on 10/10/11.

by **tax_schmax** on Mon Jan 23, 2012 5:54 pm

Certain gifts are chargeable during the donors lifetime. Often these are below the IHT threshold and therefore no tax is due. However, when the donor dies, for any gifts that were Chargeable Lifetime Transfers or potentially exempt transfers (ie gifts within 7 years of the death), you need to go back 7 years from the date of that gift to see how much of the nil rate band is available.

http://www.hmrc.gov.uk/manuals/ihtmanual/IHTM14501.htm