Much has been written about David Cameron and tax in the last few days. Much was made on Sunday and Monday of the gifts given to him by his mother in 2011.
These gifts were given to balance out a gift given to his brother by his late father, but they also form a tax planning tool used by many.
If David's mother survives 7 years after the last gift then they will no longer form part of her estate when it is assessed for Inheritance Tax purposes. It is called a Potential Exempt Transfer, or PET for short.
The records show that the prime minister received a considerable boost to his savings in 2011. Following the death of his father in 2010, Cameron was left £300,000 tax free as an inheritance. However, his mother also transferred two payments of £100,000 to him in May and July 2011. Inheritance tax is not payable on gifts that are paid at least seven years before the source of the possession dies, be it property or money.