• Settlor invested into AIM but did not survive two years:
• Created a discretionary will trust with the option to convert to an IPDI for his wife:
• Holding period of two years now satisfied and life tenant has been advised that she can now give them away IHT free.
Am I correct in thinking that these will still be a PET? Usually any gift of capital out of an IPDI by the life tenant would be and I’m not sure whether the BR qualification circumvents this? I’d appreciate your thoughts.
AIM shares have to be held at point of death for the exemption to apply. Ignoring the trust aspect, if you take out AIM shares or BR shares you have to hold them 2 years to qualify for the exemption and then if you gift them the recipient has to hold them for a further 7 years (or until death if sooner) for them to remain exempt. As soon as sold they are not an exempt asset anymore. In this case they will have a 20% IHT charge if over NRB if death happens after April 2026.
Unless there is some special trust law that overrules the gift to do with the IPDI.