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Hi
I am confused about the rule regarding grossing up- in the study books it says 25% is what the donor pays but with the notes ACCA have got it only to gross up (20/80)
Can anyone explain this to me?
Thanks
Assume:
– A CLT of 300,000 after exemptions.
– The donor pays IHT when made
– Assume all NRB usedTherefore:
– IHT = 300,000 x 25% = 75,000
– Gross = (300,000 + 75,000) = 375,000Or if 150,000 remains of NRB:
Then IHT Liability:
– 150,000 @ 0%
– 150,000 @ 25% = 37,500
– Gross = (300,000 + 37,500) = 337,500🙂
thank you- does this apply to PET’s too? also the notes on IHT ACCA had did not show 25% but done 20/80 but this equals to the same amount so i assume if i use the 25% or 20/80 it will be fine? is this correct?
Thank you again- i experienced a light switch moment were it made sense! lolNO, it does not apply to PETS. PETS are ‘chargeable on death’, so the 20% or 25% do not apply to PETS.
25% is the same as (20/80) x 100
0.25 = 80/100
🙂anymore questions use my email address: sirliam@hotmail.co.uk
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