I have a question that’s been bugging me on lifetime transfer if the donor elects to pay when he hasn’t died. I am unsure regarding to lifetime tax if you get one nil rate band a year or if you get only one nil rate band in lifetime?

The question in hand is:
James gifts net of annual exemptions 200,000 to his daughter in June 2012 (the PET). He then gifts 600,000 to trust during November 2014. If James elects to pay the lifetime tax on the gift to trust how much would be due?

I wasn’t sure if it should be a) 325000-200000=125000 left to place against 600,000 meaning 475000*0.25 is due or
b) if it was one nil rate band applied to 2012/13 and then a second applied to 2014/15 meaning only 475000*0.25 due in lifetime tax charge?

Look forward to your advice here. Thank you.

Comments

jayhelena says
December 10, 2020 at 1:29 pm
I have a question that’s been bugging me on lifetime transfer if the donor elects to pay when he hasn’t died. I am unsure regarding to lifetime tax if you get one nil rate band a year or if you get only one nil rate band in lifetime?
The question in hand is:
James gifts net of annual exemptions 200,000 to his daughter in June 2012 (the PET). He then gifts 600,000 to trust during November 2014. If James elects to pay the lifetime tax on the gift to trust how much would be due?
I wasn’t sure if it should be a) 325000-200000=125000 left to place against 600,000 meaning 475000*0.25 is due or
b) if it was one nil rate band applied to 2012/13 and then a second applied to 2014/15 meaning only 475000*0.25 due in lifetime tax charge?
Look forward to your advice here. Thank you.
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- jayhelena says
  December 10, 2020 at 1:30 pm
  Sorry typo on b) meant 2014/15 meaning only 275000*0.25
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