188体育

There are two ways (IHTM04058) in which a transfer may be a potentially exempt transfer (PET) (IHTM04057).

Where property becomes comprised in the estate (IHTM04029) of another individual or becomes qualifying settled property, you should, as a general rule, calculate the value transferred by a PET by reference to the loss to the transferor鈥檚 estate (IHTM04054). However, there can be no grossing up (IHTM14593) because the transferor is not liable for the tax on a PET and the value for tax, but not the value for cumulation, may be reduced if the value of the property falls after the gift. (IHTM14621)

Where a transfer qualifies as a PET due to the increase in value of the transferee鈥檚 estate again the loss to the transferor鈥檚 estate will be the same as the increase invalue of the transferee鈥檚 estate. The straightforward forgiveness of a loan is an example. But this provision may be relevant in other circumstances, such as the omission to exercise a right (IHTM14810). The loss to the transferor鈥檚 estate may not always equal the increase in the individual鈥檚 estate.

You should refer to Technical any case where IHTA84/S3A (2)(b) appears to apply but the loss to the transferor鈥檚 estate exceeds the increase in the transferee鈥檚 estate.