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Flashcards in IHT Deck (6)
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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


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!


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


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


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


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