Does a payment under a consent order count as a PET?
Inheritance Act proceedings are in the process of being settled. Under the draft consent order, the defendant will pay a sizeable pecuniary legacy to the claimant. Date of death was over 2 years ago so can’t do a DOV.
My understanding is that this would be a PET by the defendant, but is there a chance it could come under s.10 IHTA as something that is not a transfer of value? Could it be argued that the defendant is making the transfer in consideration of the claimant ending/staying the proceedings, and therefore it’s not intended to confer a gratuitous benefit?
IHTM is silent on this, so that leads me to believe that it is a transfer of value and therefore a PET, but all views welcome.
McCutcheon on IHT makes the point that a consent order (he only refers to it in the context of divorce) creates a liability imposed by law and that the discharge of it is not even a TOV. In figures, if an estate of £2m is reduced by imposition of a liability of £500k, the estate becomes a net £1.5m, but not by means of a disposition by the estate owner. When he pays up in cash (out of existing resorces or new borrowing) it may be a disposition by him but his estate remains £1.5m net. That is my own example as the tome itself does not provide one so any error is mine.