Inheritance Tax (9)

Question 1

If a property is mortgaged?

Answer 1

Mortgage will reduce property value if it a repayment or interest only mortage

Question 2

Are endownment mortgages deducted?

Answer 2

No as they are repaid on death by the life assurance part of the mortgage

Question 3

House to wife?

Answer 3

Exempt

Question 4

Funeral expenses and death estate?

Answer 4

Deducted

Question 5

GCT’s less than 7 years before death?

Answer 5

Deducted from nil rate band

Question 6

When does residence nil rate band apply?

Answer 6

Residence is held within the death estate and is inherited by DIRECT descendants

Question 7

What happens with residence nil rate band?

Answer 7

Is added to the nil rate band

Question 8

When there’s a verbal promise?

Answer 8

IT IS NOT RECOGNISED

Question 9

Stage 1 of IHT?

Answer 9

Lifetime transfer

Question 10

Stage 2 of IHT?

Answer 10

Additional tax on death

Question 11

Stage 3 of IHT?

Answer 11

Chargeable estate at death

Question 12

In AE if PY has already been used?

Answer 12

It can’t be used again

Question 13

Lifetime tax if trustees pay tax?

Answer 13

20%

Question 14

Lifetime tax if donor pays the tax (default assumption)?

Answer 14

25%

Question 15

Example of 20% on lifetime tax?

Answer 15

She agreed to pay IHT on the transfer

Question 16

Example of 25% on lifetime tax?

Answer 16

The trustees agreed to pay any IHT due on this transfer

Question 17

If trustee pays the tax?

Answer 17

Don’t add the lifetime tax. If person agrees to pay IHT, lifeitme tax is added

Question 18

What does NRB only apply to?

Answer 18

CLT

Question 19

What is AE available on?

Answer 19

Both CLT and PET

Question 20

How far can AE be carried for?

Answer 20

Only 1 year

Question 21

When PET is less than NRB at date of death?

Answer 21

There is no death tax

Question 22

If NRB fully used in

Answer 22

It isn’t included