Inheritance Tax (IHT) & Potentially Exempt Transfer (PET)

One way to mitigate Inheritance Tax (IHT) is to gift money away via a Potentially Exempt Transfer (PET). There are three big problems here are 1) The person gifting the assets (the Donor) has to live 7 years for the beneficiaries to benefit from the full tapering tax relief, 2) it is irrevocable in that the assets have been given away. this can be problematic for older clients or clients in ill health were the life expectancy may be shorter than 7 years, or who simply may not want to relinquish full control of the assets, 3) The gift will eat into the Donor’s nil rate band, currently £325000 until the seven year time period has elapsed.  So what is the answer, well what about investing into a fund with gives full IHT relief after just 2 years, it has also consistently returned 3% net growth, however this is a secondary consideration compared to the IHT mitigation, ergo 40% estate tax savings. One other benefit of this fund is for people who have previously sold a business and have benefitted from Business Property Relief (BPR), if any proceeds from the business sale are reinvested into the fund within 3 years of the sale completion the IHT mitigation is immediate with no two year qualifying time period.

If this is of interest call me now on 01296 641868 or mail me on

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Please note when reading any information on this website: past performance is no guide to future performance. The value of an investment may go down as well as up and an investor may not get back the full amount invested. Before investing, please ensure that you have read the information set out in the simplified prospectus, which includes full details of the charges. Any material available is directed only at persons in the UK and is not an offer or invitation to buy or sell securities. Opinions expressed on this website represent the views of Stephen Baker Financial Consultants Ltd at the time of publication, are subject to change, and should not be interpreted as investment advice.

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