Tax Flashcards
What is the current annual exemption for transfers on death
£3,000
What are exempt transders
Annual exemption of £3,000
The lifetime transfer of value is exempt if it cosntitutes normal expenditure out of incom- it is namely the gift is part of the normla expentiture of the transferor is made of after tax income ater allowingfor all other tranfer of value forming part of his normal expenditiure
any transfer made during life or on death of thetransdereors spouse or civil partner is exmpt provided both have mathching domicicies
outrights gift to charities and settlements on charitale trusts are exempt trasers
samll gifts (£250 or less)
Gifts in considersation of marriage- £1,000 forom any person, £2,500 from a grandparent or £5,000 froma parent
What is the nil rate band for inheritance tax
£325,000
Above £325,000, what are the two rates of tax
20% (lifetime transfers)
40% (transfer on death)
What is the current Residence IGHT nil rate bad (the rate whena residence is passed on death to direct descendants)
£175,000
Whrn dies residence nill rate rate band apply
when a person dies on order after 6 April 2017
Their estae included an interest in adwelling house that was a person’s residence at a time
Qualifying residential interest was inheritated by a lneal decendant
When does the qualify residents interest quality in a trust
It is an immediate post death interest which is under lineal descendant has an interest in possession
A disabled persn trsut
an 18 to 25 trust
a trust for bereaced minors
THis will not apply it is a gift to a discretionry trust
What amount iof estae means there is a tapered withdrawl for estates
Tapered amount for estates worth £2 million or more
What is the timeline for potentially exempt transfer
7 years
After three years for potentially exempt transfers, what is thre percentage decrease
20%
What is deducted from chargable assets
Liabilities including debt, foreign liabilites, all other liabilites, APR and BPR, gifts wiht rervation
What is the defintion for inheriance tax
THe price which the property might reasonably be expected to fetch if sold on the open arket
What is included in the business property releif- 100%
A busienss carried by a sole ade- 100%
Unquoted securities of a company giving the transferor control- 100%
Any unquoted shares- 100%
What is gets 50% BPR
Quotted securities or shares where the transfer contrls the company
land, buildings, plant or machinery used wholly or mainly for the purpose of a business carried on aby a company or partnership or has an interest in
What is the minimium ownership periods
must owned throught 2 year period prior to the transfer
or replaced other relevant busienss property atleast 2 out of 5 years prior to transfr
Can BR be on a lifetime gift
yes
Can APR and BPR be applied at the same time
Yes but APR is applied first and BR is applied after on the non agricultural value
How does woodland apply ot APR
It is with agriculutal land or pasture and the occupation is ancilalry to the occupation of that ladn or pastue- this includes amentiy woodland, copses commercial forestry
What is the famehouse case for a farmhouse
Mckenna V recenure & Customs
What is test for agricultural properties
character appropriate test
What are the cases where you would only get 50%
vacant possesion, short term loss of vacnnt psosession (wihtin 24 motnhs such as a FBT), land let to a tenacny beginning on or after 1 September 1995
How does APR apply
occupiedthe property throughout the 2 years before the transfer or owned the property throught the the last 7 years during which have been occupied for the purposes either by the tranferor ot somebody else
Replacement property- transfereor must have occiped the prpeprties for 2 out of 5 years the transfereer must have owned the property for at least 7 out of the last 10 years
Must show that it is clearly in hand farming, owner ocupies the farm
How are are farm cottages included
Occupied by an employyee working on the farm. Satisfied if the occupier is retired and is protected udner Rent (agrculutrual act 1976 or the Housing Act 1998) ir under a lease whcih is granted under agricultural empoloyemtn contract which ahas a protected tenancy or licence
What does an AOC usually get on the open market value
usually takes a thrid off the price
