Wills

Question 1

Inheritance Tax

Answer 1

Tax paid on estate of deceased

Question 2

Rates of Tax

Answer 2

Nil rate - 0%
Lifetime - 20%
Death - 40%

Question 3

IHT Trigger Events

Answer 3

1. PET - chargeable if dies before 7 years.
2. LCT - immediately chargeable at lifetime rate (20%)
3. Death - chargeable - s4 IHTA

Question 4

Transfer of Value

Answer 4

IHT payable on chargeable transfer
1. Chargeable transfer = transfers that are not exempt
2. Transfer of value = disposition, immediate decrease in value of estate

Question 5

How is Value calculated?

Answer 5

Lifetime - by loss in value
Death - market value on date of death

Question 6

Nil Rate Band

Answer 6

Can make £325,000 of chargeable transfers at 0%

Question 7

PET - 7 year expectancy

Answer 7

Dies within 7 years = chargeable
Otherwise, fully exempt

Question 8

LCT - trust

Answer 8

22 March 2006
Chargeable when made - 20%
Survive 7 years - no further charge
Dies within 7 years - tax rate of 40%

Question 9

Death

Answer 9

Property - value on market immediately before death
Rate of 40%
PET/LTC made 7 years before death to be re-assessed

Question 10

Cumulative Total

Answer 10

Total chargeable value of all chargeable traders made in previous 7 years

Question 11

Available Nil Rate Band

Answer 11

Full Nil Rate - Cumulative Total

Question 12

Exemptions / Relief

Answer 12

Exempt - gift to certain individuals
Relief - gifts of particular assets

Question 13

Types of Grants (3)

Answer 13

1. Grant of Probate
2. Grant of Letters of Administration (with Will)
3. Grant of Letters of Administration