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Hi
IHT QUESTION
Dee Ceased died on 1 March 2019 with a Chargeable Estate of £500,000 having made the following lifetime
gifts:
1 October 2006 £100,000 cash to son
1 June 2007 £311,000 cash into a trust
1 September 2013 £296,000 cash to daughterRequired:
(b) Calculate the IHT payable as a result of Dee’s death.
Nil rate bands are as follows:
06/07 £285,000
07/08 £300,000
11/12 £325,000In the solution, on death when calculating NRB to use against chargeable PET, why is the gross figure (310,000) deducted from NRB when the only available NRB at that time was 300,000. Does the gross figure on CLT’s use up NRB?
FYI, I have watched the videos and read notes – just need help understanding.
Thank you in advance sir.
As the answer states in step 3 in relation to the chargeability of the PET:
“However in computing any IHT payable on this transfer we must take account of what nil rate band is available after firstly deducting from it any CLT’s made within the 7 years of this transfer”
– so yes the gross figure of the CLT is deducted in determining what is the available NRB.
When calculating the IHT on lifetime transfers chargeable on DEATH – we then ONLY use the NRB in force at the date of death.
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