PET when setting up a joint bond.

 Hi everyone,

I've been puzzling over this today - if a married couple invest £500,000 into a bond held in trust and one of them dies within 7 years, is this a PET?  I am unsure whether tax would be due on £250,000 and utilise some of the NRB or not as it was joint and the bond would continue?

Hope that makes sense!  Any help greatly appreciated! (it's been a while since R03!)

Frances :)


  • Hi. It is treated as 50:50 gifts from each settlor. If it is a discretionary trust then it is a CLT not a PET. May be worth splitting if it is a discretionary trust as you only get 1xNRB for periodic/exit charges to IHT and 1xStandard Band and 1xCGT allowance (all split across all of the settlor's trusts). As ever try to have a young life assured to avoid a chargeable event being triggered on death as it could be taxed on settlor. The J trusts book is very helpful for this one. Hope this helps
    Chartered Financial Planner FPFS MCSI APP
    Head of Technical at EQ Investors

  • Very helpful, thank you!

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