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In the video lecture of chapter 24 , lecture 24.5 , the tutor has worked out an example but the answer is incomplete , he just calculated CLTS and PETS but the Death state is not dealt with considering the example consists of Residence Nil rate band and the requirement is asking for IHT and the IHT on death estate is not explained or answered , I have calculated it myself but just want to confirm the answer with someone
One more thing is confusing me is that Nil rate band is separately available on both “Transfers chargeable during lifetime” and “Transfers chargeable on death” , e.g if all of the nil rate band is used up in the Transfers during lifetime then there is separate 325k nil rate band available on Chargeable transfers on death or not ?
Thank you for your note and bringing my attention to the fact that the IHT due on the chargeable estate had not been computed.
The chargeable estate was £500,000 and all the NRB available had been used in computing the IHT payable on the lifetime transfers chargeable on death. The Residence NRB had not however been and would be available before charging the remaining part of the chargeable state at 40%.
The example used in the lecture dates from FA 2017 when the RNRB was only £100,000 and hence £400,000 would then be taxed at 40%.
In your exam however, using FA 2019 rates the RNRB is £150,000 and so only £350,000 would be taxed at 40%.
In respect of your second query – the calculation of tax due at death on lifetime transfers is indeed a SEPARATE computation and will be able to use the NRB available at the date of death which will also include any unused NRB from a deceased spouse.
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