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Tax Tutor.
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titanjst
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I am so confused by this. If a donor survied 7 years after PET and CLT were made, then the IHT is exempted. However donor has paid 25%while putting money in the trust for the portion over thresholds. And the answer for example 2 did not mention this 25% is deductable as a lifetime tax paid.
Did I misunderstood, missed any part or it is not even deductable?
If not deductable is the case why bother putting money in CLT and waste 25%?
Can anyone help?
Thanks so much
Tax Tutor
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If the taxpayer survives for more than 7 years from a CLT then no additional IHT is payable on death so there is nothing to deduct the lifetime charge from – the right amount of tax was paid in lifetime = end of story. Why a taxpayer might use a trust is a separate issue and not something to bothered with at this level just learn the method.
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