Nil rate band – unused

Dear tutor,

my answer to question 1 is £155,000 as I took into account the CLT of £50,000 that she made on 13 February 2011. I remember from the lecture that even though CLT is out the 7 years limit, it still affects the NRB as we have to pay tax immediately after CLT made. But why does the solution not take into account this CLT?

Can you please help?
Thank you!

“Assume that the current date is 1 March 2024. Lebna and Lulu were married, but Lulu passed away on 24 January 2019.

For inheritance tax purposes, Lulu’s estate was valued at £210,000 and did not include a main residence. Under the terms of her will, she left a specific bequest of £40,000 to her brother, with the remainder of the estate passing to her husband, Lebna.

During her lifetime, Lulu made the following transfers, after applying all available exemptions:

• On 13 February 2011, a chargeable lifetime transfer of £50,000
• On 21 June 2017, a potentially exempt transfer of £80,000

The inheritance tax nil rate band for the 2018/19 tax year is £325,000.

1. If Lebna were to die on 1 March 2024, what proportion of Lulu’s nil rate band could be transferred to and claimed by the personal representatives of Lebna’s estate when determining the inheritance tax payable on his chargeable estate?

A £155,000
B £205,000
C £35,000
D £285,000

Solution to question 1: £
Lulu’s NRB 325,000
Specific legacy (to brother) (40,000)
PET within seven years of death (80,000)
Unused NRB available to transfer (Note) 205,000