IHT And Minimum Time Before Spouse Who Inherits to Gift

(Hazel Jones) #1

I wonder if any Forum members could advice of any time limit after the date of death of the Testator for the spouse who takes the entire estate to pass the entire estate to the children of her and the deceased? I realise the gift will be a PET.

If there is a time limit, what is the authority please?

Hazel Jones
Garden House Solicitors

(Tim Gibbons) #2

There is no formal time limit, because this practice has no statutory recognition.

However HMRC may seek to argue that it is in reality a testamentary gift by the spouse who dies first to non-exempt beneficiaries. I would expect an argument based on sec 268 IHTA -the ‘associated operations’ rule- to the effect that the gift by the recipient spouse was part of an arrangement with the other spouse which comes within the rule. This is going to turn on the facts of the case and the time lapse between death and gift is only one of them.

I have heard it said that death is not capable of being an associated operation, although I’m not aware of any authority to this effect; I have also heard it said that whilst death may not be an ‘operation’, a will could be. The section makes it clear that ‘operation’ includes an omission, so normal English usage is clearly only of limited application.

I have some clients in a similar situation and I’d be very interested to hear other contributors experiences.

Tim Gibbons

(Kamlesh Samji) #3

I don’t believe there is any time limit. As long as there is a qualifying IPDI at the date of death, the spouse exemption would apply. So, technically, the next day would be fine.

Kamlesh Samji
KRS Estate Planning

(andrew.goodman) #4

No minimum at all for an absolute interest, you only need to exercise caution if the spouse’s interest was created by DoV.

Andrew Goodman
Osborne Clarke LLP