Joel died on 20 December 2018, and left an estate worth £1,126,000 to his daughter. Joel’s main residence, valued at £300,000, was included in the total value of the estate.
Joel did not make any lifetime gifts. How much inheritance tax is payable on Joel’s death estate?
Solution:
Death estate £ £ Gross chargeable estate 1,126,000
NRB at death (2018/19) 325,000 Add: RNRB (2018/19) 125,000 –––––––
(450,000) ––––––––
Taxable amount 676,000 ––––––––
IHT on chargeable estate (£676,000 × 40%) 270,400 ––––––––
like in this question, the annual exemption was not included. Please sir, I wish to know why ?
Ask the Tutor ACCA TX-UK
Annual exemption and nil band rate in inheritance Tax
Annual Exemptions only apply to lifetime transfers - not the death estate!
Have you worked through the notes and lectures?
Thanks very much sir. Please what about the nil rate band ? Is it use only on death transfers ?
No, the nil rate band is used firstly against lifetime transfers as shown in the study notes - and that question suggests that the answer to my question - have you worked through the notes and lectures may also be no!
I have gone through some notes, but not open tuition notes. I will go through them.
Go through the notes and the lectures together - you must study the subject properly before you attempt questions!
alright sir. Thanks
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