WE 4 & % - Tax - Exempt and Low value

Question 1

What are the two types of excepted estates?

Answer 1

• Low value
• Exempt

Question 2

What is a ‘Low Value’ estate?

Answer 2

• No IHT payable because the gross value of the estate is below NRB

gross value =

• taxable estate
  +
• specified transfers (chargeable transfers made in the last 7 years)
  +
• specified exempt transfers (gifts to spouse/charity

(NRB includes any transferred NRB but does not include RNRB)

Question 3

What is an ‘Exempt excepted estate’?

Answer 3

• Gross value is no more than £3m but no IHT is payable because after debts, spouse/charity exemption the net value of the estate is below the NRB.

(note: ONLY spouse/charity exemption count).

(NRB includes any transferred NRB but does not include RNRB).

Question 4

What factors prevent an estate from being ‘low value’ or ‘exempt’ excepted estates?

Answer 4

• trusts: more than one trust, or a single trust worth more than £250k
• specified transfers exceeds £250k
• Foreign assets worth more than £100k
• gift with reservation
• RNRB claim.