lecture 24.9: tax planning question

RRichard4y ago

Using the scenario in this lecture is it possible that the following could happen. The set up in the scenario is a PET of 900,000 And a CG liable transfer of 180,000 If the election was made to use gift relief, but A had also used his NRB previously but then were to die soon after. V would have an IHT liability of (900k * 40%) £360,000 and if she had (and was able to) to sell the shares at FMV then a CGT chargeable amount of £180k, lets say approx £30k CGT So the 'gift' of 200k, has attracted £390k of tax? If so, is V stuck with this, or is there a way to reverse this? Ta

TTTax Tutor4y ago#1

Your syllabus is limited and does not include many rules that would be applicable in real life (some of which are included in the P6 Advanced Tax Paper). One such rule is Business Relief for IHT which may give up to100% relief from IHT for qualifying business assets - that would include shares in an unlisted trading company as in this example but this is outside your syllabus and should not be included in any question at this level.

RRichard4y ago#2

thanks, seems like there's a lot more to learn after this! "tax doesn't have to be taxing" :-))

Sign into reply to this topic.