We have a situation where two PETS (now failed) and a CLT were made on the same day. Is there an established order that they are treated to have been made in for the purposes of utilising the IHT nil rate band?
Each individual transfer was less than £325,000 but the total of the 3 is more than £325,000.
Is it that because the CLT was immediately chargeable this is fully covered by the nil rate band leaving the recipients of the failed PETS to pay the IHT or is the nil rate band split equally across the 3 transfers?
But be aware that gifts are made when the recipient actually receives them - so it is worth checking how the gifts were made (for example cheques, bank transfer) and when the gift actually arrived in the recipient’s hands. Just because the donor made them on the same day doesn’t necessarily mean the transfer was completed on that day.
Kim Jarvis
Vitality
I think the answer will depend on whether the order of transfers is known. If it is, the transfers would be taken in chronological order, with the nil rate band being allocated to the failed PETs and CLT accordingly, for the purposes of calculating IHT on the death estate.
If the order of same day transfers isn’t known, it would seem fair and equitable to (re)allocate the nil rate band to each of the same day transfers for the above purpose, although I can find no explicit statutory provision for this treatment.