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- What is a PET?
- When is a PET chargeable?
- Three conditions that must be satisfied
- Transfers into trust
- Death within seven years
- What is the value transferred?
- Deemed PETs
- Deemed transfers that are PETs
- PETs and chargeable lifetime transfers made in the same tax year
- Applying the annual exemption
- Related articles
Learn how outright gifts are dealt with for inheritance tax purposes and the implications of death within seven years.
- PETs enable an individual to make gifts of unlimited value which will become exempt (i.e. escape tax) if the individual survives for a period of seven years
- PETs are only chargeable if the transferor dies within seven years of making the transfer
- PETs are assumed to be exempt at the time of transfer, and as a result no IHT is payable at that time
- One condition of a PET is that it is a gift to another individual or to a specified trust
- The value is based on the loss to the transferor’s estate
- On 19 January 2018, Philip Hammond wrote to the Office of Tax Simplification requesting a review of the IHT regime. In its second report published in July 2019, the OTS recommended that the seven year clock should be reduced to five years.