Question:
My brother is selling his flat and wants to give me £45,000 as a gift. Will I get taxed or will it be classed as a PET?
Arthur Weller Replies:
As you have written, the gift of £45,000 by your brother to you is classed as a PET for inheritance tax (IHT) purposes, and you certainly won’t be taxed on it. If your brother lives for seven years after the gift it will be ignored in any IHT calculations. If he doesn’t survive this seven year period then the £45,000 will be added to any other assets he leaves in his estate, and if the total is more than the nil rate band (currently £325,000) then there will be 40% IHT to pay on the excess above £325,000.
