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Where Taxpayers and Advisers Meet

IHT and PETS

musty
Posts: 11
Joined: Wed Aug 06, 2008 4:00 pm

IHT and PETS

Postby musty » Sun Aug 28, 2016 11:51 am

A widow was the sole beneficiary of her spouse’s estate and thereby has qualified for the double IHT allowance (£650,000)

Since her husband’s death she has however, made a number of cash gifts to her grandchildren to assist them in their property purchase. These are PETS and until 7 years have passed will be treated as part of her estate.

The total of these PETS is substantial and is in the region of £470,000.

If this lady should die before the required 7 years has elapsed, would the fact that a very substantial part of her estate for the purpose of IHT consist of the PETS, put her double IHT allowance at risk?

LozaACCS
Posts: 1504
Joined: Wed Aug 06, 2008 3:55 pm

Re: IHT and PETS

Postby LozaACCS » Mon Aug 29, 2016 2:18 pm

No it would not

Peter D
Posts: 10668
Joined: Wed Aug 06, 2008 3:37 pm

Re: IHT and PETS

Postby Peter D » Mon Aug 29, 2016 3:05 pm

Also remember IHT Taper Relief.
Read https://www.gov.uk/government/publicati ... -rate-band.
Regards Peter

maths
Posts: 7634
Joined: Wed Aug 06, 2008 3:25 pm

Re: IHT and PETS

Postby maths » Mon Aug 29, 2016 4:10 pm

The aggregate £650,000 is first offset against any IHT due on failed PETs, thus reducing the amount available for offset against the widow's estate on her death.

The transferable NRB has to be formally claimed.


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