IHT planning

Question 1

How far do you need to look back in terms of gifts & estate planning?

Answer 1

14 years

Question 2

The RNRB is only available where a qualifying residential interest is closely inherited.

This means that a property the deceased occupied as their main residence must be left to who? [5]

Answer 2

• child
• grandchild
• step-child
• spouse
• partner or survivor or child or grandhild

Question 3

What is the rule around withdrawing the RNRB?

Answer 3

For estates with a net value of over £2m, the residence nil rate band is withdrawn at a rate of £1 for every £2 over the £2m threshold.

Question 4

Name 2 classic strategies of mitigating IHT.

Answer 4

• lifetime gifts
• life assurance

Question 5

Under a DGT, what does the door reserve a right to?

And what does that mean to the value of the gift?

Answer 5

• to income from the gifted asset.
• the value of the gift is discounted for IHT purposes.

Question 6

Under loan trusts when is the IHT saving?

Answer 6

The loan forms part of her estate so there is no immediate IHT saving.

But over time her estate will fall in value as she spends the loan repayments and any growth remains within the trust and outside of her estate.