potentially exempt transfer

Also found in: Acronyms.

potentially exempt transfer (PET)

a TRANSFER OF VALUE which is initially exempted from INHERITANCE TAX but which becomes chargeable if the transferor dies within seven years.
Collins Dictionary of Law © W.J. Stewart, 2006
References in periodicals archive ?
Therefore, anything over the PS3,000 annual allowance will be classed as a "potentially exempt transfer" for inheritance tax purposes.
Just live for seven years after making the gift (a potentially exempt transfer) and there is no tax to pay.
Usual options include making a gift (a Potentially Exempt Transfer) that, provided you survive seven years, will be free of IHT; using your PS3,000 annual exemption and giving small gifts which do not exceed PS250.
The settlor makes a gift into trust which is held for the benefit of specified beneficiaries Once the trust fund is set up, normally this is classified as a gift under the 'potentially exempt transfer' scheme for taxation purposes; and the individual who sets up the trust will see that property leave their estate for inheritance tax purposes after a seven year period.
This is called a potentially exempt transfer. But if you were to gift your house and continue to live there, HM Revenue & Customs would see this as a gift "with reservation".
ATHE money will be classed as a potentially exempt transfer and, providing you live a full seven years from the date of gift, will be deemed outside your estate.
The gift known as a Potentially Exempt Transfer will normally be free from IHT providing you live for seven years after you make the gift.
a valuable racehorse) is given away in the hope that the donor will live seven years, it is known as a potentially exempt transfer (PET).
But any gifts over your annual allowance of PS3,000 per year will be classed as a 'potentially exempt transfer' and the seven-year clock will start ticking.
A Potentially Exempt Transfer (PET) is the term for gifting away money during our lifetime.
So any hight amount would become a potentially exempt transfer, and the seven-year rule applies.
Any monies in excess of this paid to the overseas spouse would have been treated as a potentially exempt transfer. The transferor would need to survive for seven years in order to avoid an IHT liability in such instances.

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