A reminder to all personal representatives on potentially exempt transfers (PETS) featured recently in HMRCs newsletter.
Under schedule 24, Part 1 of the Finance Act 2007, personal representatives of an estate are responsible for providing an accurate account of the estate’s assets and, therefore, a return to HMRC.
This includes the account of any gifts the deceased made in the seven years leading up to his/her death. Failure to report these gifts or make sufficient enquiries to identify them may result in a penalty imposed by HMRC.
It is important to note however that paragraph 1A of schedule 24 of the Finance Act 2007 confirms that the recipient of the gift is also obliged to disclose the gift.
HMRC considers its concealment to be deliberate and in this instance will impose a penalty of 50 percent of the tax undeclared. This penalty will be paid by the recipient of the gift and not the personal representatives of the estate as per the recent case of CRC v Hutchings UKFTT9 (TC).
Vardags Limited is a limited company trading as Vardags, Company No 7199468, registered in England and Wales, having its registered office at 10 Old Bailey, London EC4M 7NG. Vardags is authorised and regulated by the Solicitors Regulation Authority (SRA Number 535955). Its VAT number is 99 001 7230.
Vardags uses the term ‘Partner’ as a professional title only, to describe a Senior Solicitor, Employee or Consultant with relevant experience, expertise and qualifications (whether legally qualified or otherwise) to merit the title. Our Partners are not partners in the legal sense. They are not liable for the debts, liabilities or obligations of Vardags Limited. Similarly, the term ’Director’ is a professional title only, to describe a non-legally qualified employee or consultant of Vardags with relevant experience, expertise and qualifications to merit the title. It does not necessarily imply that the relevant individual is a director of Vardags Limited.
A list of the directors of Vardags Limited and a list of the names of those using the title of ’Director’ and ’Partner’ together with their official status is available for inspection at Vardags’ registered office.