IHT

Question 1

How do we work out DTR

Answer 1

Lower of rate paid in UK or O/S

UK IHT / Chargeable amount

Question 2

How much is allowable for additional o/s expenses

Answer 2

Max 5%

Question 3

What should we do once we apply APR

Answer 3

See if we can deduct BPR

Question 4

What are the marriage allowance

Answer 4

Parent 5000

Grandparent/ remote ancestor 2500

Question 5

Explain the circumstances if a UK domiciled person transfers assets to their non UK domiciled spouse

Answer 5

Only 325000 would be exempt from IHT / lifetime tax.
The non UK domiciled could opt to be UK domiciled however this would now mean their worldwide taxes are subject to IHT not just their UK

Question 6

When is an individual deemed domicile for IHT purposes in the UK

Answer 6

When they have been resident for at least 15 of the previous 20 tax years
And a least one of those years fall in the current tax year or the previous 3 tax years

Question 7

How do you work out a transfer of NRB what should you look out for

Answer 7

The nil rate band was 312000 in 2008/09

Find the % of the NRB unused apply that % onto the current NRB

Question 8

How to we identify an asset for BPR

Answer 8

ROSE

R elevant BP
Ownership usually 2 years/ replacement/ inherited
Sale contract
Exceepted assets used wholly and exclsuively

Question 9

When does BPR apply

Answer 9

100%
Entire trading business
shares in their unquoted trading company
shares in unquoted trading company (owned at death )

owned for 2 years prior or replaced and ownced for 5 years combined

50%
Shares from a controlling holding in quoted company
L&B P&M used in business

Question 10

When does APR

Answer 10

Owned for 2 years and used

Owned for 7 years and rented