PETs

This is a true story that happened back when I was in uni in a personal tax lecture.

In the seminar, the lecture is talking about PETs in inheritance tax and explain how the seven year rules apply, me and my mates weren’t paying too much attention, naturally, and at some point, my mates starting to look a tad confused (maybe he just work up from day dreaming and started listening), anyway, the lecturer saw his strangely puzzled faces and asked him if he got a good idea of what’s being said.

Mate – ” Well I understand how the whole seven years rule thing work, if you given it away and it’s been seven plus years since, it’s not part of IHT calculations, but why do they get special treatment.”
Lecturer – “Part of UK’s legislation and tax rules.”
Mate – *looks even more confuse* ‘…. ok’
Mate – “But how would you value them?”
Lecturer – “Just getting to that, the valuations used would be the value of the PETs on the date of the transfer and…..”
Mate -” Yeh but how do you put a solid value on a Cat or a Dog?”

Thats when the whole class just burst into laughter, I was in tears and the lecturer has got one of those ‘I shouldn’t laught but can’t hold it in’ completely red-faced look, one of the best semiliars I had in uni.