Splitting a directors loan account

Hi everyone

Here's one for you.....

Property investment company, owned by one family.  Mum & Dad are majority shareholders and are looking to exit. 

Mum & Dad have a large Director Loan Account (DLA) +£700k, and it is unlikely that this will be fully repaid.  The balance arose because of Mum & Dad selling property to the company, whilst not receiving payment from the company.  As far as we can tell, having just taken this client over, all properties were sold at arms' length, using 3rd party valuations etc.

All of which leaves our client with a large asset for IHT purposes, which is extremely unlikely to be repaid by the company.  Could Mum & Dad gift part of their DLA to the other directors / their kids?  Am I right in assuming this would be a P.E.T.?  Are there any other issues I've missed?

We can assume that Mum & Dad will be happy to gift part/all of their DLA balance.

Thanks in advance!