NIL rate band 325000

Hi Jilly,

For the gifts of share during the life time does the nil rate band apply ???

like in the following example .

A gif of shares of Afiya to her daughter .

Thanks

Question
Afiya
The following scenario relates to 5 questions.

Afiya died on 29 November 2023. She had made the following gifts during her lifetime:

(1) On 13 April 2022, Afiya made a cash gift of £32,000 to her husband.

(2) On 2 May 2022, Afiya made cash gifts to her three nieces. The first niece was given £100, the second niece was given £200, and the third niece was given £400.

(3) On 14 September 2022, Afiya made a gift of 6,500 £1 ordinary shares in Cassava Ltd, an unquoted investment company, to her daughter.

Before the transfer Afiya owned 8,000 shares out of Cassava Ltd’s issued share capital of 10,000 £1 ordinary shares. On 14 September 2022, Cassava Ltd’s shares were worth £3 each for a holding of 15%, £7 each for a holding of 65%, and £8 each for a holding of 80%.

(4) On 27 January 2023, Afiya made a cash gift of £400,000 to a trust for the benefit of her son. Afiya paid the inheritance tax arising from this gift.

On 29 November 2023, Afiya’s estate was valued at £620,000. Under the terms of her will Afiya left £150,000 to her husband, a specific legacy of £40,000 to her sister, and the residue of the estate to her children. Afiya had lived in her husband’s house and did not own a residence of her own.

The nil rate band for the tax year 2022-23 is £325,000.

Question
3. What amount of lifetime inheritance tax will be payable in respect of the lifetime gift to the trust on 27 January 2023? (Answer in £ in the Answer box)

Answer
£18,750

£
Net chargeable transfer 400,000
Inheritance tax (IHT) liability 325,000 × 0% 0
75,000 × 20/80 18,750
Gross chargeable transfer 418,750