Inheritance Tax Act 1984 section 26A

Potentially exempt transfer of property subsequently held for national purposes etc.

Section 26A provides that a potentially exempt transfer can become fully exempt from inheritance tax where the property involved is of national importance and is disposed of to a national body, accepted in lieu of tax, or gifted to the nation during the period between the transfer and the transferor's death.

• A potentially exempt transfer (PET) that would otherwise become chargeable on the transferor's death can be treated as an exempt transfer under this section.
• The exemption applies to the extent that the transferred property is, or could be, designated as pre-eminent for its national, scientific, historic or artistic interest.
• The property must, between the date of the original transfer and the transferor's death, have been sold by private treaty or otherwise disposed of to a listed national body, or accepted in satisfaction of tax, or gifted to the nation.
• The effect is to remove the inheritance tax charge that would otherwise arise when a PET becomes chargeable because the transferor died within seven years of making it.