IHTM14573 - Additional charges: cumulation
You now need to recalculate tax using cumulation as you would with a failed PET (IHTM14513). In addition to
- immediately chargeable transfers in the seven years prior to this transfer,
you need to include any PETs made
- before the transfer and
- within seven years of the death.
Bernie transferred £250,000 to a discretionary trust on 1 April 2000.
Bernie had previously made the following transfers
June 1993 £30,000 to son (PET)
Oct 1995 £80,000 to discretionary trust (chargeable when made)
July 1998 £60,000 to daughter (PET)
Bernie died in May 2002
Bernie’s death makes the July 1998 PET into a chargeable transfer. The cumulation for recalculating the tax charge on the April 2000 transfer is:
Previous chargeable transfers
The June 1993 transfer is omitted because it is outside 7 years from the date of death. It is a successful PET.