Unit 3 - Inheritance Tax

Question 1

What are the three circumstances where IHT can be charged?

Answer 1

Death

Lifetime gifts made to individuals made within seven years prior to death

Lifetime gifts to a company or into a trust

Question 2

When does IHT become payable on a lifetime gift made within seven years prior to death?

Answer 2

If the person dies within the seven years after the gift was made, IHT becomes payable.

Question 3

When does a lifetime gift to a company or trust become payable?

Answer 3

Immediately, unless the trust is for a disabled person.

Question 4

What are the steps to calculate IHT?

Answer 4

1. Identify the transfer of value
2. Find the value transferred
3. Apply any relevant exemptions and reliefs
4. Calculate the tax at the appropriate rate.