Workshop 3: Inheritance Tax (IHT) - Death Estate

Question 1

What are the three IHT trigger events that may give rise to an IHT charge?

Answer 1

1. Potentially exempt transfers (“PET”)
2. Lifetime chargeable transfers (“LCT”)
3. Death

Question 2

What are the three rates of IHT and to which extent do each range?

Answer 2

1. 0% - Nill rate band
2. 20% - Lifetime rate
3. 40% - Death rate

Question 3

What is a ‘Potentially exempt transfers (“PET”)’?

Within which conditions does this IHT trigger become chargeable?

Answer 3

Where a lifetime transfers of value may become chargeable to IHT

PETs apply where the transferor of value does not survive for seven years after the transfer [i.e., failed PETs]

Question 4

What is a ‘Lifetime Chargeable Transfer (“LCT”)?

What happens to LCTs if the transferor dies within seven years?

Answer 4

Immediately chargeable lifetime transfers of value at the lifetime rate

The LCTs are reassessed if the transferor dies within seven years