IHTM04057 - Lifetime transfers:
what is a potentially exempt transfer?
Subject to certain exceptions, a potentially exempt transfer
(PET) is a lifetime transfer of value that satisfies three
conditions. They are that
- the transfer is by an individual (
IHTM04053) on or after 18 March
1986
- it would be a chargeable transfer (
IHTM04027) apart from IHTA84/S3A (or,
if only partly chargeable, is a PET to the extent that it would be
chargeable), and
- it is a gift to another individual or to a
specified trust, (
IHTM04058). The specified trusts are
either an accumulation and maintenance trust (
IHTM16000) within IHTA84/S71 or a trust
for the disabled (
IHTM16000) within IHTA84/S89.
So, the starting point is a transfer of value (
IHTM04024) within IHTA84/S3 (1). This
is reinforced by IHTA84/S3A (6) which provides that, except as
mentioned below, when tax is charged as if a transfer of value had
been made, that deemed transfer (
IHTM04025) cannot be a PET. So, as a
general rule
- any transfer of value within IHTA84/S3 (1)
can be a PET if the three conditions are satisfied, and
- a deemed transfer of value cannot be a PET
even if those conditions are satisfied.
- a transfer of value which is wholly
covered by an exemption cannot be a PET, it is an exempt transfer.
(
IHTM04026)
But the legislation also specifically provides for
