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PET and POAT

26 October 2006
Issue: 4081 / Categories: Forum & Feedback

My question is in respect of the pre-owned assets tax (POAT). My client is a widow, who is the life tenant of an immediate post-death interest (IPDI) (see IHTA 1984, s 49A) created by her late husband's will. She did not require all the income to which she was entitled and encouraged the trustees to appoint 30% of the trust fund, represented by a holiday home at the seaside, absolutely to her son.

My question is in respect of the pre-owned assets tax (POAT). My client is a widow who is the life tenant of an immediate post-death interest (IPDI) (see IHTA 1984 s 49A) created by her late husband's will. She did not require all the income to which she was entitled and encouraged the trustees to appoint 30% of the trust fund represented by a holiday home at the seaside absolutely to her son.
The trustees did this and the appointment was treated as a potentially exempt transfer (PET) by the widowed spouse for inheritance tax purposes. Now five years later she has decided that she would like to live by the sea and has moved into the holiday home.
Will the widow be subject to a pre-owned assets tax charge or is this excluded because the appointment to the son was...

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