Inheritance Tax

Question 1

What rate of Agricultural relief for owner occupied farm?

Answer 1

100%

Question 2

What rate of Agricultural relief for landlord with interest in let farmland?

Answer 2

50% but extends to 100% if tenancy is more than 12 months long

Question 3

What is AR available for?

Answer 3

• Land
• Crops
• Buildings

NOT Animals or equipment.

Question 4

Quick Succession Relief formula?

Answer 4

(Tax Paid on 1st transfer X Net transfer)/Gross Transfer

X

Relevant %

Question 5

Intestacy - Spouse/CP only?

Answer 5

• Spouse/CP inherit everything

Question 6

Intestacy - Spouse/CP plus children

Answer 6

• Spouse/CP - chattells, first £250k and 50% of balance
• Children - 50% of balance
• Held in trust if children under 18

Question 7

Deed of Variation process (5)

Answer 7

• Only the beneficiary affected needs to agree
• If intended for IHT then needs to be stated
• No need for a will - intestate can still do DOV
• Must be within 2 years of death and signed by Ben
• Estate can only be varied once

Question 8

What is the level of periodic charge and when is it applied?

Answer 8

• 30% of the lifetime rate (20%) = 6% of excess over NRB

- Charged on the 10th anniversary of trust creation

Question 9

What is the exit charge on distribution from a Disc Trust?

Answer 9

• Payable every time capital distribution or appt is made
• Based on number of quarters since last period
• Distribution X number of quarters over 40
• Work out % of last periodic charge (Charge/FV)
• Distribution X (Quarters/40) x %

Question 10

Explain POAT

Answer 10

• Converts benefit someone gets from having free/low cost enjoyment of an asset formerly owned into a cash equivalent
• Cash equivalent added to income and subject to Income Tax

OR

Can elect to treat as GWR but IHT then applies