(2) 17 September 2013 – A gift of £47,000 to his nephew on the occasion of his marriage (3) 14 February 2015 – A gift to his wife of £100,000
Andrew made the following lifetime gifts:
(1) 23 October 2008 – A gift of £356,000 into a trust
(2) 17 September 2013 – A gift of £47,000 to his nephew on the occasion of his marriage
(3) 14 February 2015 – A gift to his wife of £100,000
(4) 26 August 2015 – A gift of £276,000 to a trust.
Calculate the IHT payable on the lifetime transfers assuming that Andrew pays any IHT due on the first transfer into trust and the trustees pay any IHT due on the second transfer into trust. Clearly state who is responsible for paying the tax and the due date for payment.
The nil rate bands are as follows:
2008/09 £312,000
2013/14 onwards £325,000
(b) Andrew died on 30 November 2019 leaving an estate comprising of his main residence valued at £500,000 upon which there was an interest only mortgage of £150,000 outstanding on this property
In addition, he owned:
Quoted shares in various companies valued at £120,000
Paintings valued at £205,000
Motor cars valued at £50,000
Building society accounts of £36,000
Andrew had a life assurance policy on his own life from which the proceeds received were £105,000.
Andrew had credit card debts of £2,500 and had also verbally promised to pay the £1,000 legal fees of a friend. Funeral expenses amounted to £5,000.
Under the terms of his will, he left £100,000 to his wife, £20,000 to his niece and the residue of the estate to his nephew.
Using the information from the part (a), calculate the IHT as a result of death on the lifetime gifts made by Andrew and the IHT on the death estate.
Clearly state who is responsible for paying the tax, who suffers it and the due date for payment.
Just stuck on Part B.
Inheritance Tax
Date of transfer
6 April 2006 to 5 April 2007 0 - £285,000- Nil rate bond 20% - rate on life-time transfers 40% - rate on death
6 April 2007 to 5 April 2008 0 - £300,000 20% 40% -
6 April 2008 to 5 April 2009 0 - £312,000 20% 40% -
6 April 2009 to 5 April 2012 0 - £325,000 20% 40% -
6 April 2012 to 5 April 2020 0 - £325,000 20% 40% 36%
Note:
The residence nil rate band for 2019-20 is £150,000.
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