Wills and estates 7 Flashcards
What is the IHT charge on gifts to charity?
They’re fully exempt
What % of their estate must a testator leave to charity to benefit from a reduce IHT rate
10%
What is the reduced IHT rate following a gift of 10% of the estate to charity?
36%
should a testator be discouraged from making specific gifts of qualifying assets (BPR an APR) to exempt beneficiaries (charities and spouse)
Yes. As the relief follows the asset there’s no saving on gifting them to an already exempt entity if there are other non-exempt beneficiaries.
How best can qualifying assets be gifted to a spouse?
Possibly gifting them to a discretionary trust of which she is a beneficiary.
What happens if qualifying assets are not specifically given away but fall into the residuary estate?
APR/BPR do not attach to the assets but the benefit of the relief is apportioned between the taxable and non-taxable beneficiaries.
Who are exempt beneficiaries?
charities
spouse
What are qualifying assets
Assets that qualify for BPR or APR
If there re no statements to the contrary, who pays IHT on gifts?
The beneficiary of the gift.
what considerations are there if a testator is gifting to their unmarried partner?
No spousal exemption will apply, therefore it may make sense to gift to kids Or a D Trust, rather than to partner (taxed) and then from partner to kids (taxed again).
What is a trust created on death called?
A will trust
what document is the trust deed in a will trust?
the will
who is the settlor of a will trust
the testator
when does a will trust deed come into existence?
on the date of death of the testator (not when the will was executed).
are the assets of a discretionary trust included in the beneficiaries’ estate?
no