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Flashcards in IHT Deck (6)
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1

Explain the formula used to calculate somebody's Periodic charge on a CLT

1. Take the excess over the Nil rate band and multiply by 20%
2. Then take that number and multiply it by 30%
Answer is the periodic charge

2

Explain the formula for calculating somebody's 'effective rate' on their periodic and exit charges

1. Periodic Charge / Value of Trust (or Pie divide by Vegetables!)
2. Multiply by 100
Answer is the effective rate!

3

Explain the calculation to apply the effective rate to find the exact amount of a periodic charge

1. Value of Trust or value of distribution
mutiply by
2. Number of quarters since last CLT divide by 40
multiply by
3. The effective rate

4

When do you include a CLT for IHT calculations when it was made more than 7 years prior to death?

If it is within 7 years of a PET or another CLT

5

What effect does a CLT have on calculations when it was made more than 7 years ago?

It reduces the NRB for subsequent gifts, however when calculating the final tax the reduced NRB is ignored

6

What is the formula used for quick succession relief?

1. Gross Estate Minus Tax paid
2. Divided by Gross Estate
3. Multiplied by tax paid
Then multiply that figure by % of QSR