Q - I have a client who intends to regularly gift all of their surplus income to their children. Being regular gifts from income, they should not be treated as potentially exempt transfers (PETs). How should these gifts be modeled in the software?
A - The software does not have a facility designed specifically to model regular gifts from income. However, the software is usually set to assume that all surplus habitual income (income that is not scheduled to be spent or saved) is spent. Read more >>
This assumption could be presented as being representative of regular gifts from surplus income.
Alternatively, consider adding these gifts as a recurring annual expense. This "expense" would set the funds to leave the client's estate annually without them being tracked as PETs or chargeable lifetime transfers. If you take this approach, add the gifts as a basic expense, not a legacy expense, which would be treated as a PET.