Quilter 21 Exit charge Where the entry charge or 10-yearly periodic charge has given rise to a tax actually payable, an exit charge will be paid on any distributions made by the trustees out of the trust fund. The rate charged is dependent on the entry and 10-yearly periodic calculations but can never be greater than 6%. Gift with reservation Assets passed from one individual to another by way of a gift, while he/she still enjoys a benefit from it. The gift will then be treated as part of the donor’s estate for IHT purposes. Gifts out of normal expenditure Gifts made by an individual out of income while they are still alive, and providing they do not affect their standard of living, are classed as gifts out of normal expenditure and should be exempt from IHT. Grant of probate A certificate granted by the Courts confirming that the will of a certain person has been proved and registered in the Court and the administration of the deceased’s estate has been granted to the personal representative proving the will. Intestate Where a person dies without having made a will, or where any will made before death is invalid. Nil-rate band The nil-rate band is the value of your estate that is not chargeable to UK inheritance tax. The amount is set by the Government and is currently £325,000, which is frozen until 2021. Periodic charge Every ten years the value of the trust, less the available nil-rate band and previous chargeable lifetime transfers, will be assessed for tax at a maximum rate of 6%. Personal representative(s) Person(s) appointed by the Courts to administer the affairs of a deceased individual. Potentially exempt transfer (PET) A gift made by an individual which is not immediately liable to IHT. It only becomes chargeable if the Settlor dies within seven years of making the gift. If the Settlor survives for seven years then the transfer is not chargeable. Pre-owned assets tax A tax charge introduced to tax certain arrangements which avoided the ‘gift with reservation’ rules. This does not apply to loan trust and discounted gift arrangements.