Eboli wrote:for example A gifts B on 1 Jan 1999 an asset and dies in 2023 having reserved a benefit over the gifted property in 2019. The PET made in 1999 has become a chargeable transfer (because there is a reservation of benefit in the 7 years before death). It may then be that A gifted C a gift in 2020 below the then nil rate band expecting it to escape IHT. But what would happen is that the nil-rate band in 2023 would be reduced by the now failed 1999 PET at it's value (in diminution terms) in 2019 and only any excess set against the now failed PET in 2020.
Surely you can only "reserve a benefit" at the point of making a gift, or within 7 years of making that gift.
So if A makes a gift to B in 1999 then it becomes exempt in 2006, and nothing that happens after that matters. At that point A could indeed benefit from the gift without any effect.
Isn't the pertinent example rather that A gifts (say, a house) to B in 1999 but continues to live (rent-free) in it until 2019. Then he loses all benefit but, because he dies in 2013, there was benefit in the 7 years prior to death?
The 7-year clocks starts ticking not necessarily at the point of the gift, but rather only when all benefit has gone, and then runs for 7 years.
MyNameIsUrl wrote:If I'd made the gift on 1 Jan 1999 I would have expected to shred the records of that gift on 1 Jan 2006, having survived 7 years. The implication of the statement quoted seems to be that records must be kept for life, in case a reservation of benefit occurred at any date no matter how long after the gift was made.
And moreover in the 3 times I have been an executor nobody ever asked me whether there had been ANY benefit from an item that had EVER been gifted. Only whether there had been benefit reserved for items gifted in the last 7 years.
So as a practical matter executors just do not operate on Eboli's assumption.