Inheritance Tax

Question 1

Pre-owned Assets Tax

Answer 1

• Charged at ‘official rate’ of 2% of the value of the retained interest
• No charge if notional income less than £5,000 p.a. (or interest is less than £250,000)
• Notional income in excess of £5,000 is taxed at marginal rate.
• Can instead opt for GWR rules

Question 2

Gifts with Reservation

Answer 2

• Remains in donors estate
• But gift is a transfer of value
• Relief given if there is a double charge