Example 3. insurace you took at proceeds while market value was 180k. couple minutes before: The death estate comprises all assets held on death at their open MV at that date (known as the probate value).
Why in Example 2, CLT was included for tax calcualtion since they were made also more than 7 years ago? Gifts into Trust (1 June 2012 – £336,000). Exempt: This gift is exempt from IHT because it was made more than seven years before Dee’s death (1 March 2024).
I’ve missed something here – in part 2, Illustration 3, we are told that the trust is for £400,000 but the transfer of value is £450,000? Could you explain how this £450,000 was reached?
IHT PART 2 18:07 why is there no need to add the 65500 tax due with the chargeable amount to reach the gross c/f ? we added it in the first transaction to reach the c/f gross. why not on the last transaction ?
I have a feeling it’s because for the first CLT (2008/09) it was the DONOR who agreed to pay the IHT , and whenever the donor pays, to get to the gross chargeable transfer amount , you will add the chargeable amount + lifetime tax due. If the DONEE pays the IHT on the CLT (which is what happens in (14/15), to get to the gross chargeable transfer amount, you ONLY stick to chargeable amount and NOT add the lifetime tax due. That’s my understanding!
I wonder why in MCQ1 for first gifts there was a deduction of Nil rate band, but there were no AE deductions -3000, -3000?
because the gross amount is given. AE is already deducted from it.
Example 3. insurace you took at proceeds while market value was 180k.
couple minutes before: The death estate comprises all assets held on death at their open MV at that date (known as the
probate value).
What am I missing?
see the proforma on pg. 185 in the notes. (Insurance policy proceeds…)
Why in Example 2, CLT was included for tax calcualtion since they were made also more than 7 years ago? Gifts into Trust (1 June 2012 – £336,000). Exempt: This gift is exempt from IHT because it was made more than seven years before Dee’s death (1 March 2024).
I’ve missed something here – in part 2, Illustration 3, we are told that the trust is for £400,000 but the transfer of value is £450,000? Could you explain how this £450,000 was reached?
IHT PART 2 18:07 why is there no need to add the 65500 tax due with the chargeable amount to reach the gross c/f ? we added it in the first transaction to reach the c/f gross. why not on the last transaction ?
I have a feeling it’s because for the first CLT (2008/09) it was the DONOR who agreed to pay the IHT , and whenever the donor pays, to get to the gross chargeable transfer amount , you will add the chargeable amount + lifetime tax due. If the DONEE pays the IHT on the CLT (which is what happens in (14/15), to get to the gross chargeable transfer amount, you ONLY stick to chargeable amount and NOT add the lifetime tax due. That’s my understanding!