IHT

Question 1

What IHT rate do you pay on lifetime transfers to individuals?

Answer 1

None, they are potentially exempt transfers

Question 2

What is the annual exemption amount for IHT?

Answer 2

£3k

Question 3

If you’ve already deducted the £325k nil rate band from lifetime transfers, this gets ignored when doing death calculations and the £325k is deducted from the first available point. Any lifetime tax already taken is deducted from death tax liability.

Answer 3

-

Question 4

For valuation of share holdings in IHT, do you use the lower or higher of the quarter up and marked bargain average?

Answer 4

LOWER (it is kind)

Question 5

How do you calculate the value of shares for IHT?

Answer 5

Lower of 1/4 up and high/low bargain average.

Question 6

What is the annual exemption in IHT?

Answer 6

The first £3k of lifetime transfers made in one tax year are exempt.

You can carry forward last year’s unused excess for this year

Annual exemption is used against transfers in CHRONOLOGlcal order

Question 7

What is the IHT proforma mnemonic?

Answer 7

T
A
M
A
C

-

C A
N
L
G

-

G
F
R
N
@36%/40%
L T R
L L P
L Q

TArMAC

CaN LG

George Foreman Ruins Noses @36/40% Less Than Rivals
Lennox Lewis Properly
Loves Quidditch

Question 8

How does IHT double taxation relief work?

Answer 8

You can deduct the LESSER of the foreign tax OR the what the AVERAGE rate of UK IHT would be in the property(minus admin fees up to 5%)

You work out the average rate by doing the actual ultimate UK IHT amount / the gross estate value (inc the foreign property)

Question 9

If someone dies in 2009 and leaves their home to their spouse, will they have a RNRB to give when their spouse then dies

Answer 9

Yes, as long as their spouse dies after 2017 and house goes to direct descendants