Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › IHT – PET
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- AuthorPosts
- October 18, 2024 at 5:39 pm #712543
Dear Jill,
Please help me understand why the annual exemptions DO NOT reduce the PET in the question below (extracted from the ACCA article “Inheritance Tax, part 1):
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“Tony died on 16 August 2023 leaving an estate valued at £775,000. Under the terms of his will, Tony’s estate was left to his grandchildren. The estate included a main residence valued at £ 435,000.
On 30 April 2021, Tony had made a PET of £400,000 to his son.”
———————————————————————————————MY ASSUMPTIONS:
I assumed the PET figure (£400,000) given in the question is the “transfer of value,” so I deducted the 2 annual exemptions (for the current and prior years), showing a Chargeable Amount of £394,000.
But when I compared my answer with the model answer, I realized the given PET figure is the “Gross Chargeable amount”.
I’m still confused because the question did not say “The PET is after deducting the exemptions”. - AuthorPosts
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