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Hi Sir
I’ve got a number of questions related to the cumulative seven year donor period. I hope I have written them clearly enough:
1. Is it right that: after seven years have lapsed from an initial gift made to a trust, a full £325k or less can be again gifted to a trust and the entire amount would not incur an immediate charge?
2. So, if £325k were gifted, into a trust, in Jan 2010 and then £325k in Jan 2019 (into a trust again), neither of the two CLT gifts would incur an immediate charge to IHT?
3. However, on death, would the second transfer be fully chargeable on death, at 40% – because the NRB can only be awarded once, when calculating IHT chargeable at death or would the £325k NRB still apply – despite the fact that it has already been used during lifetime?
4. Alternatively, if a single gift, to a trust, of £325k was made in Jan 2011 and then the donor dies in Feb 2019, would a full, “renewed”, £325k be available against the death estate, despite £325k being awarded against the initial £325k CLT?
Slightly Different Q (and time periods):
5. If the NRB in force, say in Jan 2008, was lower than £325k (say £300k), but all the NRB was used in 2008, would the difference between the amount of NRB available in 2015 (within the 7 year period) compared to 2008 (so in this instance £25k) be awardable as an increment of NRB on any CLTs made within this period where the NRB was higher?
Thank you
1. Correct
2. Correct
3. No – assuming no other lifetime transfers (PET’s or CLT’s) have been made, if the taxpayer dies within 7 years of the Jan 2019 CLT it will have a full NRB available as the earlier CLT (Jan 2010) was MORE than 7years before the Jan 2019 CLT and is not therefore deemed to use any of the available NRB when computing the IHT chargeable on death
4. Correct assuming no other lifetime transfers are chargeable on death
5. No
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