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Maria died on 22 March 2025 leaving a chargeable estate valued at £495,000. She had made gross chargeable lifetime transfers of £83,000 on 1 June 2023 and £47,000 on 7 April 2016. How much inheritance tax is payable in respect of Maria’s chargeable estate of £495,000?
the answer is 101200
why wasnt 83000-3000-3000 done?
by doing this i got 98800Because the £83,000 in June 2023 is the GROSS CHARGEABLE TRANSFER which means that AEs have already been deducted and the lifetime tax calculated and added in if the donor had paid it.
So the NRB at death is £(325,000 – 83,000) = £242,000.
The IHT on the death estate is £(495,000 – 242,000) x 40% = £101,200.
If you are given the GROSS CHARGEABLE TRANSFER do not do anything else to that figure other than reduce the NRB for later transfers within 7 years.
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