gift - PET rules

[paulnotcluedup]

Hello,

I'd be really grateful for advice on gifts made out of capital savings - not out of income.

I received a significant windfall from the sale of an asset. CGT was paid on this.

I went on to gift the post-tax profit to my wife. I understood there to be no tax on this gift.

I have since learned that my wife went on to make a similar sized cash gift to our son. They tell me this counts as a PET and tax will be tapered if she survives 3-7 years.

Given that the money originated with me, can I make sure that this is allowed please. Can my wife further gift it to our son? Is there anything that needs to be declared if either I or my wife should die?

Many thanks for your advice.

[AGoodman]

If your wife died within 7 years of the gift, her executors/administrators would need to include the gift when calculating any IHT on her estate.

The taper is a red herring unless the gift was over £325,000. Below that, it just uses up her nil rate band. As tax on the nil rate band is 0% anyway, there is no point tapering it (taper reduces the tax rate not the value being taxed).