Bespoke Tax Accountants

Specialist tax advice, accountancy and tax returns

01242 505970
info@bespoketax.com

  • Home
  • About Us
    • Meet The Team
    • Careers
    • Statutory Information
    • Privacy Policy
  • Who We Help
    • Personal and Family
    • Business
    • Our Clients
  • News
    • Making Tax Digital
  • Giving Back
  • Contact
  • Cloud Accounting
    • Xero

Lifetime transfers where estate of another individual is increased

23rd January 2019 By bespoketax

Lifetime transfers where estate of another individual is increased

Most gifts made during a person’s life are not subject to tax at the time of the gift. These lifetime transfers are known as ‘potentially exempt transfers’ or ‘PETs’. These gifts or transfers achieve their potential of becoming exempt if the taxpayer survives for more than seven years after making the gift. If the taxpayer dies within 3 years of making the gift, then the Inheritance Tax position is as if the gift was made on death. A tapered relief is available if death occurs between three and seven years after the gift is made.

A transfer of a property where the estate of another individual is increased may still be treated as a gift to an individual provided two conditions are satisfied. These are that the property does not become comprised in the estate of another person (not ‘individual’), but the estate of another individual is increased.

HMRC’s internal Inheritance Tax manual provides the following example to illustrate this point: Christina owes Penelope, a parent, £50,000. Penelope forgives the debt. This is a transfer of value since the value of Penelope’s estate is diminished by the disposition. This transfer can potentially be a PET.

Planning note

It would seem good practice to keep a list of any PETs that clients make. It is also important to keep a record of any exemptions that are used as well as details of any regular gifts made out of surplus income.

Filed Under: Uncategorised

Recent News

  • CGT during divorce or separation
  • Taxpayers who return to the UK
  • Corporation Tax – marginal relief from 1 April 2023
  • Claiming Child Trust Fund cash

News Categories

  • Budget Summary
  • Business
  • Business Support
  • Capital allowances
  • Capital Gains Tax
  • Company Secretarial
  • Construction Industry Scheme
  • Corporate Governance & Regulation
  • Corporation Tax
  • Customs Duties
  • Duties
  • Employee Benefits
  • Employment & Payroll
  • Employment Law
  • European Union
  • Family Tax Credits
  • General
  • HMRC notices
  • Income Tax
  • Inheritance Tax
  • National Insurance
  • NIC & Pensions
  • Other duties
  • Overseas personal tax issues
  • Overseas tax issues
  • Payroll
  • Pension
  • Personal
  • Practice News
  • Stamp duty
  • Stamp Duty Land Tax
  • Tax credits
  • Tax Diary
  • Value Added Tax
  • VAT & Duties

About Us

Bespoke has a reputation for helping our clients make the most of their financial situations and in turn we have become a trusted extension of their business or family.

Bespoke assist with compliance requirements, providing specialist tax advice, and planning for now and the future.

Keep informed.
Sign up for our Topical Newsletter

Our FREE monthly newsletter will keep you up to date with the latest news related to the world of accountancy.

Register Here

Contact

Delta Place,
27 Bath Road, Cheltenham,
Gloucestershire, GL53 7TH
01242 505970
info@bespoketax.com

ICAEW Chartered AccountantsXERO Gold PartnerChartered Institute of TaxationMember of EISA

Copyright © 2022 · Bespoke Tax Accountants · Website by Culpepper & Co

.