Evidence of the payment of a PET

[sigmund]

Perhaps someone could kindly enlighten me as I find the following extremely puzzling. It would appear that, if one makes a PET, no form exists to register it with HMRC, and there is no procedure for notifying HMRC of the details when one is made. How, therefore, can HMRC know if a PET has been made, to whom the PET has been made, the amount and the date that it was made?

As my aunt's executor, how can I tell what monetary gifts she has given in the past, to whom and when. Obviously, I can not ask her as she is dead and she did not keep any useful records or even apparently realise that perhaps it might be helpful - book-keeping and receipt keeping were never her forte?

[AnthonyR]

As the executor you have a duty to make all reasonable and appropriate investigations to determine any PETs that have been made.

This is likely to involve reviewing bank statements to find transfers to individuals and talking to friends and family to determine if any large gifts were made. Bear in mind that any gifts under £250 per person per year are exempt, as is the first £3,000 a year (plus various other exemptions around gifts out of income, marriage, etc).

Start with getting bank statements (or copies) to determine whether it's realistic that she made large cash gifts (are her savings materially different from 1/3/5/7 years ago) and if so try and track where they went. However, from a practical point of view if it's clear that she didn't or couldn't give away more than £3,000 in any given year then you may not need to check each and every bank statement.

[sigmund]

Thank you for your reply, but I still do not understand why PETs are not and apparently can not be registered with HMRC. As I mentioned in my first paragraph, the system seems crazy. Does it mean that HMRC can not actually have any information as to whether a PET has been made, to whom, for how much and when? If so, it seems to be a wonder that anyone ever declares a PET.

[Lee Young]

If an executor knows of a gift and does not declare it he is committing fraud; the possibility of a custodial sentence tends to keep most executors honest!