Unit 1, Topic 4 Flashcards
In July 2016, Joan made a gift to her daughter of £350,000. She has made no other gifts in her lifetime. Joan died in October 2020 leaving a total estate worth £420,000. Let’s say the full rate of IHT is 40% on estate over the nil-rate band of £325,000. How much IHT is applied to the value of the gift that is in excess of the nil-rate band?
A) £5,000
B) £6,000
C) £8,000
D) £10,000
B) £6,000
Inheritance tax would be charged on which of the following?
A) The total value of the deceased’s estate
B) The total value of the estate above the available nil-rate band
C) The value of the estate less any gifts that have been made in the previous seven years
B) The total value of the estate above the available nil-rate band
Tax on a chargeable lifetime transfer in excess of the available nil-rate band is payable:
A) Immediately, at the full rate
B) Only if the transferor dies within seven years of the transfer
C) Immediately, at a reduced rate
C) Immediately, at a reduced rate
Luis sold his house, which has been his main residence since he bought the house in 2020, and downsized to a one-bedroom flat, making a gain of £325,000. Is the capital gain made from this sale eligible for private residence relied?
A) Yes, because the house was Luis’s main residence the gain from the property’s sale will be eligible for private residence relief
B) No, because Luis has not lived in the house long enough to qualify for private residence relief
C) We do not have enough information to decide if the gain is eligible for private residence relief or not
C) We do not have enough information to decide if the gain is eligible for private residence relief or not
Melanie bought a painting in a charity shop for £40. It turned out to be by a well-known artist, and she sold it three years later for £2,000. She had to pay CGT on the gain she made. True or False
False
To qualify for roll-over relief, a business must replace an asset not more than five years from the date of disposal. True or False
False
