IHTM04064 - Lifetime transfers: deemed potentially exempt transfers

The legislation also provides that the following transfers shall be treated as if they were PETs. ( IHTM04057) This means that the individual ( IHTM04053) has made a PET and not simply a transfer of value so the conditions to qualify as a PET do not have to be considered. The transfers are

• the lifetime cessation of a reservation in GWR property, ( IHTM04072) FA86/S102 (4), and
• discharge or reduction of a debt subject to abatement FA86/S103 (5).

Because these transfers are deemed to be PETs, and a PET is transfer of value ( IHTM04024) that would, apart from IHTA84/S3A be a chargeable transfer, ( IHTM04027) they join the charging structure as chargeable transfers. This means that no exemptions ( IHTM11000) may be deducted.

The same would apply for reliefs such as agricultural relief ( IHTM24000) and business relief ( IHTM26000). However, these reliefs are specifically available against the deemed PET that arises on the cessation of reservation (FA86/SCH20/PARA8). However, there is no corresponding provision for the reduction of a debt subject to abatement. Any transfer made in this way is not entitled to any exemptions or reliefs.