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Hello,
– Chan died on the 8 December 2018, having made a lifetime cash gift of £500,000 to a trust on 16 December 2017. Chan paid the inheritance tax arising from this gift.
Who is responsible for paying the additional inheritance tax arising from the gift made to the trust as a result of Chan’s death, and when will be due?
A.The trustees on 30 June 2019.
B. The personal representatives of Chan’s estate on 8 June 2019.
C. The personal representatives of Chan’s estate on 30 June 2019
D.The Trustees on 8 June 2019.1. The answer is A.
2. In the revision kit :” The IHT payable as a result of death is always paid by the recipient of the gift. The extra tax is due six months after the end of the month of death.”3. As per the above statement why the recipient of the gift is the trustees and not the personal representatives”
As per your quote from your revision kit “The IHT payable (note on lifetime transfers!) as a result of death is always paid by the recipient of the gift. The extra tax is due six months after the end of the month of death.”
The recipient of the gift is the trust administered by the trustees – therefore the trustees pay the tax out of the trust fund!
The personal representatives will pay the IHT on the death estate, taking the money out of the taxpayers’ estateHello,
Sandeep made a gift of £425,000 to a trust on 10 November 2018. No agreement has been made
about who will pay the inheritance tax (IHT) in respect of this gift.
What is the due date for payment of the IHT and who is primarily liable for its payment?
A The trustees are liable to make the payment by 31 May 2019
B The trustees are liable to make the payment by 30 April 2019
C Sandeep is liable to make the payment by 31 May 2019
D Sandeep is liable to make the payment by 30 April 20191. The answer is C.
2. In your reply above, you’ve mentioned that “The recipient of the gift is the trust administered by the trustees – therefore the trustees pay the tax out of the trust fund!”3.However in the examiner’s report, it says that :
-The donor, Sandeep, is primarily liable for the tax due on a CLT and the due date
is the later of the following:
(i) Six months after the end of the month of transfer
(ii) 30 April after the end of the tax year of transfer4. Please clarify.
Thanks
You really must spend more time studying the notes and lectures and then reading the information in the question carefully and in this case properly reading the previous answer I gave to you – the first question was dealing with IHT payable on a CLT as a result of the taxpayer’s DEATH – this question is entirely different as it is dealing with the IHT payable in LIFETIME!
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