Inheritance Tax Flashcards
(19 cards)
What country is a house located in for inheritance tax purposes?
Located where it is physically situated.
What country is cash in bank located in for inheritance tax purposes?
Located where the branch is situated in.
What country are shares located in for inheritance tax purposes?
Located where the register is situated in.
What country are life assurance policies located in for inheritance tax purposes?
Located where proceeds are payable.
What is the cap on spouse exemption if the spouse is not UK-domiciled?
£325,000.
Is BPR applied to a lifetime transfer/gift when working out lifetime tax?
Yes.
What is the BPR for business property used in a partnership?
50%.
If someone gifts an asset and then that asset is sold of - do we use the actual sale proceeds or the value of the asset at the time of the gift when calculating CGT?
We use the value of the asset at the time of the gift since the person still owned it.
If an asset is sold for less than what it is worth, what relief is applied at death tax?
Fall-in-value relief.
Can gambling expenses be deducted from one’s death estate?
No.
When calculating BPR, we subtract any investment properties from the total - do we also subtract any long-standing loans?
- Yes, we subtract this from both the nominator and denominator.
- (- investments - long-standing loan) / (- long standing loan)
How is transfer of NRB/RNRB treated?
By percentage, just in case the transfer of NRB/RNRB is from someone before 2008 where the NRB was a different value.
How long does someone need to be resident in the UK to be considered UK-domiciled?
If they have been resident in the UK for 15 of the last 20 years, including one of the four tax years ending with the current tax year.
When & how is a Double Taxation Relief (DTR) applied?
- When there is a tax liability overseas.
- DTR is charged on the lower of the tax liability overseas OR the inheritance tax paid on the asset at the average rate.
How is QSR calculated?
Inheritance Tax Paid x (Increase in transferee’s estate / Decrease in transferor’s estate) x %
What is the average rate of tax for IHT purposes?
Tax expense / Chargeable estate
Where assets in a death estate are situated abroad, what’s the cap on additional expenses incurred (%)?
5%
What is the small gift exemption?
Gifts less than £250 are exempt from inheritance tax.
If someone’s RNRB is being transferred to their spouse and their death estate (including a home) was worth over £2,000,000 - what must you do?
Taper the RNRB before transferring as a PERCENTAGE to their spouse.
