potentially exempt transfer

= PET
A lifetime gift made by an individual to another individual, or into an interest-in-possession trust that does not attract a liability to inheritance tax at the date of the gift. No charge occurs if the donor survives seven years after the date of the gift. If death occurs within seven years of the gift, the total lifetime gifts in the seven years preceding death are reviewed. The gifts are taken in chronological order with the first £275,000 (2005–06) worth of gifts being covered by the nil-rate band. Gifts in excess of this sum are charged at a flat rate of 40% with graduated relief for gifts made between three and seven years before death. The Inland Revenue provides detailed rules for PETs in the Inheritance Tax Manual.

Accounting dictionary. 2014.

Look at other dictionaries:

  • potentially exempt transfer — (PET) England, Wales A transfer of value made during the donor s lifetime, that comes within the provisions of section 3A Inheritance Tax Act 1984. A PET is only chargeable to IHT if the donor fails to survive for seven years from the date of the …   Law dictionary

  • potentially exempt transfer — PET A lifetime gift made by an individual to another individual, or into an interest in possession trust that does not attract a liability to inheritance tax at the date of the gift. No charge occurs if the donor survives seven years after the… …   Big dictionary of business and management

  • potentially exempt transfer — Fin see chargeable transfer …   The ultimate business dictionary

  • potentially exempt transfers — When an individual makes a gift to another person, the gift will usually be liable to inheritance tax only if the donor dies within seven years of making the gift. If the donor survives for seven years, the gift will be exempt from inheritance… …   Financial and business terms

  • exempt transfers — Transfers resulting in no liability to inheritance tax. These are: • the first £3000 transferred in any tax year; • gifts to a spouse; • normal expenditure out of income; • small gifts, up to £250, to any number of individuals; • marriage gifts,… …   Accounting dictionary

  • exempt transfers — Transfers resulting in no liability to inheritance tax These are: • the first £3000 transferred in any tax year; • gifts to a spouse; • normal expenditure out of income; • small gifts, up to £250, to any number of individuals; • marriage gifts,… …   Big dictionary of business and management

  • chargeable transfer — Certain lifetime gifts that are transfers of value not covered by any of the exemptions and are therefore liable to inheritance tax. If such a lifetime gift is not a potentially exempt transfer, it is a chargeable transfer. If the gift is a… …   Accounting dictionary

  • chargeable transfer — Certain lifetime gifts that are transfers of value not covered by any of the exemptions and are therefore liable to inheritance tax If such a lifetime gift is not a potentially exempt transfer, it is a chargeable transfer. If the gift is a… …   Big dictionary of business and management

  • chargeable lifetime transfer — England, Wales Lifetime transfers of value (transfer of value) (broadly, gifts) that are immediately chargeable to inheritance tax at 20% (subject to any exemptions and reliefs and also subject to the individual s nil rate band). Broadly, a… …   Law dictionary

  • chargeable transfer — Fin in the United Kingdom, gifts that are liable to inheritance tax. Under U.K. legislation, individuals may gift assets to a certain value during their lifetime without incurring any liability to inheritance tax. These are regular transfers out… …   The ultimate business dictionary

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