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Dear Tutor,
will you please kindly clarify why I cannot use AE (3.000 pounds) of 2003/04 when computing PET2 (marriage gift) ?
in fiscal year 03/04 Jimmy gave £10,000 in cash, so this is exempt PET (we ignore it) => so in my understanding AE of 03/04 has NOT been used up so far!Thank you
Jimmy G made the following lifetime gifts:
4 June 2002 – £246,000 cash gift to a discretionary trust
4 January 2004 – £10,000 cash as a birthday present to his son Jack
4 March 2005 – 20% of the shares in JG plc to his daughter Jill as a wedding present. At that time they were valued at £150,000.
4 June 2007 – A further £100,000 cash gift to the discretionary trust created on the 4 June 2002.AE’s are applied strictly on a chronological basis so that if a PET arises first in the tax year it will be deemed to have used the AE(s) irrespective of whether the PET becomes chargeable or not!!! Thus the January 2004 PET WILL be deemed to have used the AE of 03/04 despite the fact that the taxpayer survives for more than 7 years from that date and hence it becomes exempt from IHT
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