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HMRC internal manual

Inheritance Tax Manual

Liability on potentially exempt transfers (PETs): priorities

The legislation does not specify any order of priorities between the different categories of persons liable under IHTA84/S199(1)(b), (c) and (d). However the legislation does make the liability of those persons primary and that of the personal representatives (IHTM30043) under IHTA84/S199(2) secondary.

You should treat the following persons as primarily liable:

  • the transferee (IHTM30051)
  • where the property was settled by the transfer, the trustees.

Where there are indications that there may be difficulties in collecting from the transferee or trustees (e.g. where the transferee has dealt with the assets given, or is out of the jurisdiction, or the settlement has been wound up and the trust property distributed), you should consider whether, exceptionally, any other persons may be liable under IHTA84/S199 (1)(c) and (d) and, if so, take early action to collect from them.