A Potentially Exempt Transfer (PET) enables an individual to make gifts of unlimited value which will become exempt from Inheritance Tax (IHT) if the individual survives for a period of seven years. The transfer is a gift made by an individual to another individual or to a specified trust.
Is there a limit on potentially exempt transfers?
These transfers are potentially exempt from Inheritance Tax, and there is no limit on such transfers. Any gifts you make to individuals will be exempt from Inheritance Tax as long as you live for seven years after making the gift. These sorts of gifts are known as ‘Potentially Exempt Transfers’.
How is property transferred from one family member to another?
Thus, here are common property transfer scenarios between family members and the respective tax implications: You add another family member to the deed as a joint owner of your home so that it will pass to them automatically upon your death.
What are the conditions for a potentially exempt transfer?
Subject to certain exceptions, a potentially exempt transfer (PET) is a lifetime transfer of value that satisfies three conditions. They are that it would be a chargeable transfer ( IHTM04027) apart from IHTA84/S3A (or, if only partly chargeable, is a PET to the extent that it would be chargeable), and
Is it legal to transfer property between family members in South Africa?
There are practical advantages for those thinking about transferring their property to their family instead of bequeathing it to them after their death, but there are legal, tax and cost implications to consider. The transfer of property between family members in South Africa: What does it entail?
Do you have to pay transfer duty on immovable property?
Transfer duty Bequests of immovable property are exempt from transfer duty. In contrast, if the property is transferred during the lifetime of the parent, the child who acquires the property will be liable for transfer duty on the value of the property above R1,000,000 (Feb 2020 Budget).
