Inheritance Tax

You do not need a statement like this about when a lifetime transfer is “supposed” to be made, you need to understand the implications for IHT of making such a transfer.
The fact remains that if you choose to make gifts in lifetime rather than simply on death that there is a potential tax advantage in doing so – if you live for 7 years, then what was a potentially exempt transfer (PET) when made will become exempt, therefore the earlier you make such gifts the better the chance of living for the required 7 years and such transfers therefore avoiding an IHT charge!

If a PET is made by a taxpayer there is no immediate IHT charge and if he / she then survives for 7 years there will never be any IHT charge on the transfer for as stated in earlier answer the PET will become exempt.
If a taxpayer makes a transfer in lifetime into a trust it is a Chargeable Lifetime transfer (CLT) and will therefore be immediately chargeable to IHT at the lifetime rates. If the transfer is within the available nil rate band (NRB) then no tax will be payable. IHT is a cumulative donor based tax that works on a 7 year cycle so that if the taxpayer survives for 8 years the CLT will not become chargeable on death and if there were no other lifetime transfers made before death the chargeable estate would enjoy a full NRB of £325,000