Q&As

A taxable estate consists of failed potentially exempt transfers (PETs) and a gift with a reservation of benefit. There is no direction in the Will stating that the estate bears the burden of the tax and so this burden will fall to the donees subject to taper relief. Is it necessary for the executors to submit IHT100 to disclose these failed PETs and the gifts with reservation of benefit or is that the responsibility of the donees of the failed PETs and the person to whom the gift with reservation was made?

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Published on LexisPSL on 11/02/2021

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • A taxable estate consists of failed potentially exempt transfers (PETs) and a gift with a reservation of benefit. There is no direction in the Will stating that the estate bears the burden of the tax and so this burden will fall to the donees subject to taper relief. Is it necessary for the executors to submit IHT100 to disclose these failed PETs and the gifts with reservation of benefit or is that the responsibility of the donees of the failed PETs and the person to whom the gift with reservation was made?
  • Failed PETs
  • Gift with reservation of benefit
  • Refund of IHT from third parties
  • Double charges—gifts with reservation and death

A taxable estate consists of failed potentially exempt transfers (PETs) and a gift with a reservation of benefit. There is no direction in the Will stating that the estate bears the burden of the tax and so this burden will fall to the donees subject to taper relief. Is it necessary for the executors to submit IHT100 to disclose these failed PETs and the gifts with reservation of benefit or is that the responsibility of the donees of the failed PETs and the person to whom the gift with reservation was made?

Failed PETs

In the case of a potentially exempt transfer (PET) which becomes chargeable on the transferor’s death, the accounting party is any person the value of whose estate was increased by the transfer and, where the death of the transferor is after 8 March 1999, the transferor’s personal representatives (PRs). The account should be delivered before the end of 12 months from the end of the month in which the transferor died or, where it is delivered by their PRs, before the expiry of three months from when they first act as such if that is later.

Where, as a result of the death of the transferor within seven years, tax becomes chargeable on a PET, or additional tax becomes payable on a chargeable transfer, the following persons are liable:

  1. (a) the transferor’s PRs

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