IHT

Question 1

Where is the gross chargeable transfer in the working?

Answer 1

End of stage 2

Question 2

Transfers to IIP under CLT or PET?

Answer 2

PET

Question 3

What are the tax rates for trustees and transferors paying?

Answer 3

• trustees - 20%

- transferor - 25% (default)

Question 4

When calculating available NRB, what do you deduct?

Answer 4

The gross chargeable transfers of previous years

Question 5

When is fall in value relief applicable and where does it sit in the working?

Answer 5

If the MV of an asset at sale or death is lower than actual MV at that time

Come off working at start of stage 3

Question 6

How do you calculate related property and when is it used?

Answer 6

A/(A+B) x entire cost

A - value of transferor’s holding
B - value of related person’s holding

Only used when other portion is held by spouse or charity/political party that received it off transferor within last 5 years

Question 7

When is QSR applicable?

Answer 7

• property acquired by deceased in 5 years before death

- there was a charge to IHT on initial transfer

Question 8

What should death estate be split between?

Answer 8

• settled property - assets in a trust where deceased was life tenant
• free estate - assets held at death

Question 9

Who pays what tax on death estate?

Answer 9

• settled property - trustees

- free estate - personal representatives

Question 10

When does BPR occur?

Answer 10

• before all other exemptions
• business property is transferred (unquoted shares, quoted >50%, soletrader/partner business)
• owned for over 2 years (includes if deceased if inherited)

Question 11

What are excepted assets to BPR?

Answer 11

Not used wholly/mainly for business purposes throughout 2 years prior and are not required for future use in the business

Question 12

When is APR applicable?

Answer 12

• property occupied by transferor and used for farming 2 years before death
• owned for 7 years by transferor and used by someone else

Question 13

How do you calculate the GCT if the trustees pay the tax (in lifetime tax stage 2)?

Answer 13

Just take the chargeable transfer from stage 1

Question 14

How do you calculate the GCT if the transferor pays the tax (in lifetime tax stage 2)?

Answer 14

Chargeable transfer + lifetime tax

Question 15

What is the exemption of transfer from UK domiciled to non-domiciled spouse?

Answer 15

325k, take off at start of IHT working

Question 16

What transfers are exempt from death estate?

Answer 16

• spouse
• charity
• qualifying political donations (2 MPs or 1MP + 150k votes)

Take off all of these as part of the transfer price

Question 17

Allowable deductions on death estate?

Answer 17

• mortgage
• personal debts
• taxes due
• funeral expenses

Question 18

How do you calculate QSR?

Answer 18

Do a death estate working for the relevant person, including taper and subtract the death tax calculated from death tax calculated in main working

Question 19

How do you calculate excess NRB to transfer?

Answer 19

(NRB-NRB used)/NRB = %

Then do 100% + % and apply to your NRB