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Hello, I have difficulty understanding when the AE is taken into consideration twice and when once. For example, sometimes on a CLT the solution shows that the amount of 3000 is deducted twice, sometimes once. I know that if this is not used, it can be transferred to next year, however, transferring to next year does not mean counting it twice. Moreover, there is never information in the assignment as to how much of it is used or not. Please, help.
Hello. A.E of 3000 is available for lifetime transfers and available on both PET and CLT in a chronological order. Unused A.E can be carry forward for one year only. But A.E of current year must be used first and then any b/f A.E.
example, For tax year 2019/20, Tom made cash gift to his daughter of 40,000
Tom also made cash gift of 120,000 to a trust and Tome will pay inheritance tax for that.hence gross chargeable amount for PET to daughter is £34000
Transfer = 40,000
Less: A.E of current year (2019/20) = -3000
Less: b/f A.E of (2018/19) = -3000
= 34000Similarly, Gross chargeable amount for CLT to trust is £120,000
Transfer = 120,000
Less: A.E of current year (2019/20) = -0
Less: b/f A.E of (2018/19) = -0
= 120,000Note that Unused A.E can only be carry forward for one year only. But A.E of current year must be used first and then any b/f A.E.
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