Potentially Exempt Transfer
A 'potentially exempt transfer' is a gift made from from one person to another which does not have an immediate liability to Inheritance Tax.
If the donor dies within 7 years of the gift being made, Inheritance Tax may be payable, however, if the donor lives for more than 7 years, the gift would not be subject to Inheritance Tax.
Even if the donor died within 7 years of making the gift, providing the value of the gift (at the time it was made) was less than the then nil-rate band, there would still be no Inheritance Tax. (Providing the donor did not have other assets which took him or her above the nil-rate band.)
For more information, see HM Revenue & Customs
