maths Flashcards
(21 cards)
What is the first step in distributing property under a will?
Identify property passing outside of the will
What must be identified regarding assets in the context of a will?
Identify all assets passing under the will
What expenses must be paid off before distributing assets under a will?
Debts and funeral expenses
What is the final action in the distribution process according to the terms of the will?
Distribute relevant assets in accordance with the terms of the will
List the highest category of relatives for estate distribution when someone dies intestate.
- Spouse
- Issue on the statutory trusts
- Parents
- Brothers and sisters of the whole blood
- Brothers and sisters of the half blood
- Grandparents
- Uncles and aunts of the whole blood
- Uncles and aunts of the half blood
- The Crown (Bona vacantia)
What is the first step in calculating IHT on death estate?
Identify the transfer of value = deemed transfer of the deceased’s estate on death
What is the value transferred in relation to joint tenancy?
JT is 50%
What exemptions and reliefs apply to IHT?
- Spouse or civil partner exemption 100%
- Charity exemption 100%
- Business Property Relief
- Agricultural Property Relief 100%
- Non-UK domiciled with non-UK assets 100%
What is the ownership requirement for Business Property Relief?
2 year ownership requirement
What is the maximum transferable nil rate band for spouses or civil partners?
Max £650,000 for spouses/civil partners (only if both dead)
What is the residence nil rate band for closely inherited properties?
£175,000 additionally
What is the tax rate applied if the estate exceeds certain thresholds?
Taxed at 40% (unless 10% of estate after exemptions goes to charity, then 36%)
What are Potentially Exempt Transfers (PETs)?
Gifts that may be exempt from IHT if specific conditions are met
What is the annual exemption for gifts?
Minus £3,000 annual exemption (usually x2)
What happens if you give away a house but continue to live in it?
NOT a PET
What is the taper relief percentage for gifts made 0-3 years before death?
100% of 40%
What is the taper relief percentage for gifts made 6-7 years before death?
20% of 40%
Who is liable to pay tax on gifts?
Receiver is liable to pay tax 6 months
What is a Lifetime Chargeable Transfer (LCT)?
Trusts or money to a company that may be subject to tax
What is the tax rate for Lifetime Chargeable Transfers if the donor dies within 7 years?
Taxed at 40%
What is the tax rate for LCTs when gifted?
Taxed at 20% trustee when gifted which is credited, 25% if donor
