PETs becoming chargeable on death within 7 years

A man who had lived in England all his life died on 1 September 2026. On 1 September 2023 he gave his adult son £406,000 from his savings in a UK bank account. The son put the money in his sole account and neither returned it nor used it for the man. At the man's death, the son still held the money. The man made no other lifetime gifts. His estate at death comprised £500,000 in cash, left to his sister. He had never married or entered a civil partnership. An annual exemption of £6,000, including the unused exemption carried forward from the previous tax year, is available against the gift. No other exemption or relief applies. The nil-rate band is £325,000 and the death rate is 40%. Which statement best describes the inheritance tax treatment of the lifetime gift following the man's death?