Hello sir, I hope you're doing great.. please confirm this BPP MTQ answer.
Ning's husband died on 12 March 2007, and 70% of his inheritance tax nil rate band was not used.
On 14 August 2008 Ning had made a gift of £90,000 to her daughter, and on 7 November 2018 she made a gift of
her main residence, worth £220,000, to her son. These amounts are after taking account of any available
exemptions.
What is the amount of Ning's husband's nil rate band that Ning's personal representatives could claim were she to die on 20 March 2020?
The answer given behind is: 227500
Ning's personal representatives could claim her deceased husband's unused nil rate band of £325,000 ?
70% = £227,500.
But my question is, shouldn't the answer be 70% of 105000,
As in respect of death estate, The potentially exempt transfer on 7 November 2018 will utilise £220,000 of the nil rate band, so only
£(325,000 – 220,000) = £105,000 is available against the death estate.
Please help me clear my confusion sir.
Ask the Tutor ACCA TX-UK
Unused NRB
The question asks "What is the amount of Ning’s husband’s nil rate band that Ning’s personal representatives could claim were she to die on 20 March 2020?"
The answer to this is the BPP answer as given - 70% of £325,000 = £227,500
This would then be added to Ning's NRB of £325,000.
The question is NOT about how that available NRB would then be used, which would be against any lifetime transfers, before the death estate - the answer however would never be 70% of £105,000!
Sign into reply to this topic.