Inheritance Tax

Question 1

Occasions of charge

Answer 1

Death
Gifts within 7 years pre death
Other lifetime gifts

Question 2

CLTs & PETs

Answer 2

CLT= any gift which is not exempt or A PET example transfers to a trust
Chargeable at date of gift, additional IHT if donor dies within 7 years, tax rates are lifetime rates and/ or death rates , paid by donor or donee

PETs = gift by individual to another individual
Only chargeable if donor dies within 7 years of gift
Death rates
Paid by donee

Question 3

IHT calculation gifts

Answer 3

Transfer of value X
Wholly exempt transfers (X)
Specific exemptions. (X)

Chargeable transfer A

Tax calculation

Chargeable transfer. A
Less available nil rate band. (X)
Taxable amount. X

Question 4

Exemptions

Answer 4

Lifetime gifts =
annual exemption £3000 per tax year
Carry forward 1 tax year only,

Small gifts £250 total per donee per tax year

Marriage exemption - £5000 per parent, 2,500 per grandparent

Normal expenditure out of income must be able to maintain standard of living

Lifetime gifts and Seth estate = inter spouse / civil partner

Question 5

Gifts 3-7 year pre death reduction

Answer 5

Over 3 20%
Over 4 40%
Over 5 60%
Over 6 80%