Cora made a cash gift of £300,000 to her niece on 30 April 2010.
She then made a cash gift of £500,000 to her nephew on 31 May 2011.
Both of these amounts are stated after deducting available exemptions.
Cora subsequently died on 31 October 2015.
What amount of inheritance tax was payable as a result of Cora’s death in respect of the cash gift of £500,000 to her nephew?
A £190,000
B £110,000
C £114,000
D £105,000
Zoe died on 17 February 2015. She had made the following gifts during her lifetime:
(1) On 7 March 2010, Zoe made a cash gift of £270,000 to her son as a wedding gift when he got married.
(2) On 21 June 2010, Zoe made a cash gift of £620,000 to a trust. Zoe paid the inheritance tax arising from this gift.
Zoe’s husband had died on 25 July 2007, and 20% of his inheritance tax nil rate band of £300,000 for the tax year 2007–08 was not used.
The nil rate band for the tax year 2009–10 is £312,000, and for the tax year 2010–11 it is £325,000.
Required:
(b) Calculate the additional inheritance tax which will be payable in respect of the gift made to the trust as a result of Zoe’s death. (8 marks)
Afiya died on 29 November 2012. She had made the following gifts during her lifetime:
(1) On 13 April 2011, Afiya made a cash gift of £32,000 to her husband.
(2) On 2 May 2011, Afiya made cash gifts to her three nieces. The first niece was given £100, the second niece was given £200, and the third niece was given £400.
(3) On 14 September 2011, Afiya made a gift of 6,500 £1 ordinary shares in Cassava Ltd, an unquoted investment company, to her daughter.
Before the transfer Afiya owned 8,000 shares out of Cassava Ltd’s issued share capital of 10,000 £1 ordinary shares. On 14 September 2011, Cassava Ltd’s shares were worth £3 each for a holding of 15%, £7 each for a holding of 65%, and £8 each for a holding of 80%.
(4) On 27 January 2012, Afiya made a cash gift of £400,000 to a trust. Afiya paid the inheritance tax arising from this gift.
On 29 November 2012, Afiya’s estate was valued at £620,000. Under the terms of her will Afiya left £150,000 to her husband, a specific legacy of £40,000 to her sister, and the residue of the estate to her children.
The nil rate band for the tax year 2011–12 is £325,000.
Required:
(a) Calculate the inheritance tax which will be payable as a result of Afiya’s death. (12 marks)
On 23 August 2007, Pere Jones made a gift of a house valued at £420,000 to his son, Phil Jones. This was a wedding gift when Phil got married.
Pere Jones
Pere died on 20 March 2013 aged 76, at which time his estate was valued at £880,000. Under the terms of his will, Pere divided his estate equally between his wife and his son, Phil. Pere had not made any gifts during his lifetime except for the gift of the house to Phil.
The nil rate band for the tax year 2007–08 is £300,000.
Phil Jones
Phil is aged 48. The house which he received as a wedding gift from Pere, his father, was always let out unfurnished until it was sold on 5 April 2013. The following income and outgoings relate to the property for the tax year 2012–13:
| £ | |
|---|---|
| Rent received | 22,000 |
| Sale proceeds | 504,000 |
| Cost of new boundary wall around the property (there was previously no boundary wall) | (5,300) |
| Cost of replacing the property’s chimney | (2,800) |
| Legal fees paid in connection with the disposal | (8,600) |
| Property insurance | (2,300) |
Phil has no other income or outgoings for the tax year 2012–13.
Required:
(a) (i) Calculate the inheritance tax that will be payable as a result of Pere Jones’ death; (6 marks)
Tom Tirith, aged 76, made a cash gift of £200,000 to his daughter on 20 December 2010. He is now going to make a cash gift of £450,000 to a trust on 20 February 2012.
The nil rate band for the tax year 2010–11 is £325,000.
Required:
(i) Calculate the lifetime inheritance tax that will be payable in respect of Tom Tirith’s gift of £450,000 to a trust if:
(1) the trust pays the tax arising from the gift; or
(2) Tom pays the tax arising from the gift.
The total marks will be split equally between each part. (3 marks)
(ii) Assuming that Tom Tirith pays the tax arising from the gift of £450,000, calculate the additional inheritance tax that would be payable in respect of the gift if Tom were to die on 30 June 2016.
Note: You should assume that the nil rate band of £325,000 remains unchanged. (4 marks)