A gift made by an individual during his lifetime to another individual
is treated as a “potentially exempt transfer” or “PET”: no tax
is due provided the transferor survives for seven years after the gift.
If he dies less than seven years, but more than three years, after the
gift, reduced rates of tax will be due on death.
Business property relief is available on lifetime gifts, and can reduce
or eliminate any death tax due if the transferor fails to survive for
seven years. Its effects, however, are only available if the transferee
still holds either the original assets gifted, or equivalent replacement
property, at the date of the transferor’s death.
|
