The first portion of a chargeable transfer or the estate on death that is subject to a nil rate of inheritance tax. For 2016-17, the nil-rate band is £325,000. From April 2008, it became possible for spouses and civil partners to transfer their nil-rate band to the surviving partner on death, thereby effectively raising the threshold at which tax becomes payable to £650,000.
A potentially exempt transfer (PET) is a lifetime gift by an individual that becomes exempt from inheritance tax if they survive seven years beyond the date of the gift. If the donor passes away within seven years, inheritance tax liability may arise.
