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Special legacy relating to IHT

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Special legacy relating to IHT

  • This topic has 5 replies, 3 voices, and was last updated 1 year ago by Tax Tutor.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
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  • June 4, 2021 at 7:35 pm #623210
    Nellikalayil
    Member
    • Topics: 6
    • Replies: 6
    • ☆

    How do you treat special legacy related to IHT. Where can i learn more about this?

    June 6, 2021 at 11:00 pm #623540
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    That is not a term that I recognise as having any technical basis – not sure where you have seen this?

    June 7, 2021 at 3:26 pm #623671
    Nellikalayil
    Member
    • Topics: 6
    • Replies: 6
    • ☆

    Q192 and few other questions in Kaplan Kit. It states legacy has been given to Wife or brother. Is this term relevant for the exam? If so, how to treat it? Please help, thankyou

    June 7, 2021 at 5:55 pm #623731
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    Are you sure the legacy was referred to in the questions as “special” – or did it simply say “specific” – I do not have the Kaplan kit to check this out.

    June 7, 2021 at 8:37 pm #623767
    HasanY
    Member
    • Topics: 0
    • Replies: 2
    • ☆

    It does say “specific”.

    As I understand it, this is no different to just a legacy and is deducted at the end of the death estate computation after deducting debts owed, outstanding taxes and funeral expenses.

    June 7, 2021 at 9:55 pm #623779
    Tax Tutor
    Member
    • Topics: 2
    • Replies: 3965
    • ☆☆☆☆☆

    Thank you for clarifying and you are partly correct – it is simply a legacy of a specific asset(s) to a specific person.
    They are not however deducted in computing the Chargeable Estate!
    IHT is computed on the Chargeable Estate but specific legacies go to the beneficiaries without any tax being deducted with the residue of the estate AFTER deducting the IHT payable then going to the residuary legatee.
    See study notes and lectures for further details

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