Mark McLaughlin looks at a possible let-out from an inheritance tax charge on certain asset transactions.
If an individual gifts an asset to another individual, it will generally be a ‘potentially exempt transfer’ (PET) for inheritance tax (IHT) purposes, unless a specific IHT exemption applies (e.g., for gifts between UK domiciled spouses).
A PET is provisionally treated as an exempt transfer when made, which becomes exempt if the donor survives at least seven years thereafter.
Too cheap? No problem!
So much for gifts, but what happens if someone sells an asset to another individual, but a higher price could have been obtained? Is the difference between the asset’s value and the disposal proceeds a PET (which could be chargeable if the transferor dies within seven years)?
Not necessarily. The IHT legislation (IHTA,
