Gross chargeable transfer

Dear tutor,

in the question 2 of the gross chargeable transfer (GCT) carried forward in Illustration 3 – Chapter 23 Inheritance tax of Opentuition’s Note for Taxation (TX-UK) – FA2023:

a. Why the GCT carried forward in case the donee pays IHT is different with that in case the doner pays IHT?

b. Should the GCT in the first case be like this: Taxable amount £119,000 + £23800 = £142,800?

c. Can you please also explain how to calculate GCT? I feel like getting lost understanding the concept.

Thank you!

“Ronald created a discretionary trust on 1 June 2023 and transferred £450,000 to the trustees. The
trustees agreed to pay the IHT due.

1. Assuming Ronald has made no other lifetime transfers, calculate the IHT payable on the
transfer.

Chargeable amount: £444,000
Taxable amount: £119,000
Lifetime tax @ 20%: £23,800

2. Calculating the gross chargeable transfer (GCT) carried forward.

In this example the trustees are paying the tax at a rate of 20% and the GCT is therefore £444,000.

If, on the other hand, the donor – Ronald had agreed to pay the IHT then his estate would have
diminished, or reduced by both the gift and the tax.

Taxable amount £119,000
Lifetime tax @25% £29,750
Gross chargeable amount to carry forward £148,750”