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Sir,
if in iht computation there are a pet initially and then clt(both within 7 year span before death) of transfer values 400000 and 500000 respectively.then we will use full nil rate band of 325000 in computing chargeable when made.
and then again we will use the full nil rate band in computing chargeable on death.or more simply my question is that nil rate band is available cumulatively or separately for computing both chargeable when made and on death??
thanx in advanceThe nil rate band (NRB) is available on a cumulative 7 year cycle when calculating the IHT payable in lifetime on CLT’s and we use the NRB in force at the date of the transfer.
On the death of the taxpayer we do a separate computation dealing with lifetime transfers chargeable on death where we tax the transfers (both PET’s and CLT’s) that fell within the 7 years before death and use the NRB available at the date of death which is applied to the earliest transfer first.
This would therefore mean that in computing the tax payable on death the NRB would be applied to the PET ahead of the CLT.
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