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Hello Sir,
this question is from BPP mock exam and i have given the question and answer below.
I have a doubt as to why we do not deduct AE from 158000 that was transferred on 12th aug 2015. If we deduct AE it should be 152000 as we get 2 year AE available.
Q) Dylan put $270,000 into a trust on 2 February 2018. He had previously given $200,000 to his brother on 24 October 2013 and had made another gift into a trust on 12 August 2015 of which the gross chargeable transfer was $158,000.
How much lifetime tax is payable on the gift on 2 February 2018?
answer:-
The correct answer is: $24,250
2.2.18 CLT $270000
AE 17/18 -3000
16/17 b/f -3000Nil band @ 17/18 325000
Less GCT < 7 years from date of gift (158000)answer :- 97,000 x 20/80 24,250
Look at section 7 of the IHT chapter within the OT notes. You have to read carefully the wording in the question and understand what that means – the question gives you the amount of the “chargeable transfer” made on that date NOT the transfer of value!
The chargeable transfer is AFTER deducting any available AE’s
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