New Post Advanced Search
We are currently experiencing a high volume of spam and have increased the sensitivity of our spam filters. This could mean that genuine posts may get caught. If you believe this has happened to one of your posts, please email the Forum team on [email protected] As always, we are really grateful for your patience whilst we get this sorted - which we'll do as soon as possible.
Important update! We have recently reviewed and updated our Forum Rules and FAQs. Please take the time to familiarise yourself with the latest version.

PET Gifts

7 replies 620 views
GnittihGnittih Forumite
52 posts
If it is known that the only IHT that is due on an estate is say the result of a gift of £10000. being made within 7years of a persons death which HMRC form needs to be completed?....IHT205 or IHT400

Replies

  • Keep_pedallingKeep_pedalling Forumite
    8.3K posts
    Fifth Anniversary 1,000 Posts Name Dropper Photogenic
    ✭✭✭✭
    The executor for any estate where IHT is going to need to be payed or needs to claim the RNRB to avoid it, needs to fill in IHT 400 and the associated supplementary sheets.
  • GnittihGnittih Forumite
    52 posts
    I’ve had a look at IHT205 and section 9.1 requests ‘Gifts and other lifetime transfers (after deduction of allowable exemptions) made in the 7 years before they died. This does not include legacies in the will.’

    Doesn’t this indicate that the Executor would use this form?
  • Keep_pedallingKeep_pedalling Forumite
    8.3K posts
    Fifth Anniversary 1,000 Posts Name Dropper Photogenic
    ✭✭✭✭
    Gnittih wrote: »
    I’ve had a look at IHT205 and section 9.1 requests ‘Gifts and other lifetime transfers (after deduction of allowable exemptions) made in the 7 years before they died. This does not include legacies in the will.’

    Doesn’t this indicate that the Executor would use this form?

    No, because right at the top of the form it says it is only to be used where the estate is equal to or or less than the nil rate band, or up to 2 times that where the a transferable NRB can be applied, or where the estate is under £1 and spousal exemption can be applied.

    None of those conditions have been met in your case so you have to go with IHT 400.
  • GnittihGnittih Forumite
    52 posts
    In the case I am considering,...the estate would pass to surviving spouse via the Will, and is not greater than £1m
  • edited 18 January at 7:47PM
    bowlhead99bowlhead99 Forumite
    11.9K posts
    Part of the Furniture 10,000 Posts Name Dropper Post of the Month
    ✭✭✭✭✭
    edited 18 January at 7:47PM
    Gnittih wrote:
    ...the only IHT that is due on an estate is say the result of a gift of £10000. being made within 7years of a persons death
    Gnittih wrote:
    In the case I am considering,...the estate would pass to surviving spouse via the Will, and is not greater than £1m

    If the estate is going to the surviving spouse, so not using up the nil rate band, why is inheritance tax due on £10,000 of gifts? The PET gift is not exempt because the person didn't survive the 7 years, but it would be within the nil rate band, and the rest of the estate is going to the spouse, but you say IHT is due on the gift?
  • Important update! We have recently reviewed and updated our Forum Rules and FAQs. Please take the time to familiarise yourself with the latest version.
  • GnittihGnittih Forumite
    52 posts
    Quote: ‘If the estate is going to the surviving spouse, so not using up the nil rate band, why is inheritance tax due on £10,000 of gifts? The PET gift is not exempt because the person didn't survive the 7 years, but it would be within the nil rate band, and the rest of the estate is going to the spouse, but you say IHT is due on the gift?’

    I have been a little confused about the gift, the 7year rule and IHT.However my query was to try and establish which IHT205 or IHT400 applied.Now,from your helping me identify the position wrt to the gift I think it would be IHT205...do you agree?
  • GnittihGnittih Forumite
    52 posts
    bowlhead99 wrote: »
    If the estate is going to the surviving spouse, so not using up the nil rate band, why is inheritance tax due on £10,000 of gifts? The PET gift is not exempt because the person didn't survive the 7 years, but it would be within the nil rate band, and the rest of the estate is going to the spouse, but you say IHT is due on the gift?

    I have been a little confused about the gift, the 7year rule and IHT.However my query was to try and establish which IHT205 or IHT400 applied.Now,from your helping me identify the position wrt to the gift I think it would be IHT205...do you agree?
Sign In or Register to comment.

Quick links

Essential Money | Who & Where are you? | Work & Benefits | Household and travel | Shopping & Freebies | About MSE | The MoneySavers Arms | Covid-19 & Coronavirus Support