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Can you please answer the following question.
On 14 November 2014, Jane made a cash gift to a trust of £800,000 (after deducting all available exemptions).
Jane paid the inheritance tax arising from this gift. Jane has not made any other lifetime gifts.
What amount of lifetime inheritance tax would have been payable in respect of Jane’s gift to the trust?
A £95,000
B £190,000
C £118,750
D £200,000I think the answer is 95,000 [(800,000 – 325,000)x20%]
Incorrect, Answer is C, if the doner pays the tax on lifetime transfers, there will be 25% tax not 20%.
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