Who Pays IHT on Failed PETS?

Inheritance

Published / Last Updated on 07/10/2025

90+ videos explaining inheritance tax rules, inheritance tax rates, trusts, tax, discounted gift trusts, wills, loan trusts and ways to save inheritance tax.

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Who Pays the Inheritance Tax When a Gift Fails? Understanding Failed PETs?

Who Pays the Inheritance Tax When a Gift Fails? Understanding Failed PETs?

A common inheritance tax question is: Who pays the inheritance tax when a Potentially Exempt Transfer (PET) fails because the donor dies within seven years? Many people assume the tax automatically ...

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Inheritance

Understanding the 20% vs 25% Tax Rates on Chargeable Lifetime Transfers (CLTs)

Understanding the 20% vs 25% Tax Rates on Chargeable Lifetime Transfers (CLTs)

1. Key Principle Inheritance Tax (IHT) on a Chargeable Lifetime Transfer is based on the loss to your estate, not on what the trust receives. Because your estate can reduce ...

1m7d

Inheritance

PETs or CLTs First? The Correct Order for Inheritance Tax Planning

PETs or CLTs First? The Correct Order for Inheritance Tax Planning

When families start planning for inheritance tax, they often ask a simple question that has a surprisingly complex answer: Should I make PETs first, or set up CLTs first? Let's ...

1m9d

Inheritance

The Rysaffe Ruling Explained: How Different-Day Trusts Reduce Inheritance Tax

The Rysaffe Ruling Explained: How Different-Day Trusts Reduce Inheritance Tax

What Is the Rysaffe Ruling? The 2003 Court Decision The Rysaffe ruling comes from a 2003 Court of Appeal case, Rysaffe Trustee Co (CI) v Inland Revenue Commissioners (IRC). The court ...

1m10d

Inheritance

What Happens to a Life Insurance Trust if Your Beneficiary Dies Before You?

What Happens to a Life Insurance Trust if Your Beneficiary Dies Before You?

If your child (the trust beneficiary) dies before you, and the life insurance policy was written in trust, then nothing happens at his/her death for inheritance tax (IHT). The ...

1m21d

Inheritance

Discounted Gift Trusts (DGTs): The Crucial Trust Choice

Discounted Gift Trusts (DGTs): The Crucial Trust Choice

Key Takeaway For DGTs, Absolute Trusts usually avoid the 14‑year IHT trap, making them safer for clients who want instant IHT reduction without risking CLT interactions. Discretionary Trusts offer flexibility, ...

2m24d

Inheritance

Inheritance Tax and Gift Main Home: Pre Owned Assets Tax POAT vs Gift With Reservation GWR

Inheritance Tax and Gift Main Home: Pre Owned Assets Tax POAT vs Gift With Reservation GWR

Overview Pre-Owned Assets Tax (POAT) and the Gift With Reservation (GWR) rules both deal with situations where someone gives away an asset but continues to benefit from it. They work ...

5m3d

Inheritance

Spousal Bypass Trust: A Solution for Some for IHT on Pensions?

Spousal Bypass Trust: A Solution for Some for IHT on Pensions?

Updated for the 2027 pension & IHT changes A spousal bypass trust is a discretionary trust that can receive pension lump‑sum death benefits instead of paying them directly to a ...

5m4d

Inheritance

Mortgages in Retirement: Clear Guidance on Your Options

Mortgages in Retirement: Clear Guidance on Your Options

Mortgages in retirement have changed dramatically in recent years. What used to be a narrow market dominated by equity release has now expanded into a range of flexible lending ...

5m20d

Inheritance

Buy to Let: Discretionary Trust vs Family Investment Company (FIC)

Buy to Let: Discretionary Trust vs Family Investment Company (FIC)

A Simple, Structured Comparison for UK Families: The differences between using a discretionary trust and using a family investment company to make gifts of buy-to-let property Overview Discretionary TrustA legal ...

6m11d

Inheritance

Sell AIM Listed Shares due to 50% Property Relief PR and Replace for 100% Relief

Sell AIM Listed Shares due to 50% Property Relief PR and Replace for 100% Relief

What Changed? (Autumn Budget 2024) From 6 April 2026: AIM‑listed shares will qualify for 50% Business Relief (BR) (not 100%). Unquoted trading company shares continue to qualify for 100% BR (subject ...

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Inheritance

Replacing Lost Business Relief: Why Timing Can Save Families Millions

Replacing Lost Business Relief: Why Timing Can Save Families Millions

Business Relief (BR) reduces Inheritance Tax (IHT) on business assets, while Business Asset Rollover Relief (used to be called Business Reinvestment Relief) defers Capital Gains Tax (CGT) Business Relief: What ...

6m21d

Inheritance

Death in Service & Inheritance Tax (IHT) From April 2027

Death in Service & Inheritance Tax (IHT) From April 2027

Government Confirms Exemption for Standalone Group Life Schemes Overview The UK government has confirmed that standalone registered group life (death‑in‑service) schemes will remain exempt from the new IHT rules taking ...

6m22d

Inheritance

Care with Surplus Capital or Income Gifts to be IHT Free Immediately

Care with Surplus Capital or Income Gifts to be IHT Free Immediately

With frozen Nil Rate Band (NRB) for Inheritance tax (IHT) since 2009 and both NRB and Residence Nil Rate Band (RNRB) frozen until 2031, we are going to pay ...

7m4d

Inheritance

Unused Pensions in Estate for IHT and Losing Residence Nil Rate Band

Unused Pensions in Estate for IHT and Losing Residence Nil Rate Band

We all have inheritance tax (IHT) nil rate band allowances where no IHT is payable: Nil Rate Band (NRB) - £325,000 Residence Nil Rate Band (RNRB) - £175,000 (if you are ...

7m14d

Inheritance

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Latest Videos

Who Pays the Inheritance Tax When a Gift Fails? Understanding Failed PETs?

Who Pays the Inheritance Tax When a Gift Fails? Understanding Failed PETs?

A common inheritance tax question is: Who pays the inheritance tax when a Potentially Exempt Transfer (PET) fails because the donor dies within seven years? Many people assume the tax automatically ...

2d

Inheritance

Consider Separate Bank Accounts When Planning for Care Fees

Consider Separate Bank Accounts When Planning for Care Fees

When planning for potential care fees, many couples overlook an important aspect of their finances: joint bank accounts and jointly held investments. For most couples, sharing finances is entirely normal. ...

3d

Care

What Capital Is Means Tested When Paying for Care Fees?

What Capital Is Means Tested When Paying for Care Fees?

Many people are surprised to discover just how much of their wealth can be taken into account when they need long-term care. Understanding which assets count towards the care ...

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Care

Who Pays IHT on Failed PETS?