INHERITANCE TAX

211 TOM (ADAPTED) Walk in the footsteps of a top tutor no5
Tom died on 1 May 2021.
He had made a gift with a chargeable amount of £450,000 (after all available exemptions) to
a trust on 20 February 2015. Tom paid the inheritance tax arising on the gift. This was Tom’s
only gift.
Tom’s estate at the date of death included the following assets as well as some cash in the
bank:
1 A 50% share, valued at £150,000, in a successful racehorse
2 Cash winnings from betting on horse racing of £40,000
3 His main residence valued at £875,000 which has an outstanding repayment mortgage
of £500,000.
The executors have determined that Tom’s chargeable estate for IHT purposes was
£2,000,000 and they filed their account of the estate assets with HM Revenue and Customs
on 3 January 2022.
Tom left all of his estate to his children. His wife is still alive.
The nil rate band for the tax year 2014/15 was £325,000.

SOLUTION
Value of estate 2,000,000

RNRB available (175,000)
NRB at death 325,000
Less: GCTs in previous 7 years > £325,000 (Note) (325,000)
–––––––
NRB available (0)
––––––––
Taxable amount 1,825,000
–––––––
IHT × 40% 730,000
––––––––
Good day,Pls i don’t understand why there was another NRB of 325000 minused from the NRB at death 325000 because there is no previous gift/transfer 7 years before the 20th feb,2015 gift of 450,000.