Exemptions 1 / 2

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MC Question 1

On 1 July 2014, Sameer made a cash gift of £2,500 to his sister.
On 1 May 2015, he made a cash gift of £2,000 to a friend.
On 1 June 2015, he made a cash gift of £50,000 to a trust.
Sameer has not made any other lifetime gifts.

In respect of Sameer’s cash gift of £50,000 to the trust, what is the lifetime transfer of value for inheritance tax purposes after taking account of all available exemptions?

A £48,500
B £44,000
C £46,000
D £46,500

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Question 1Note 1

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:
What amount of marriage exemption will be allowable here?

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Question 5c

You should assume that today’s date is 15 March 2014.
Tobias has recently inherited the residue of his aunt Mildred’s estate.

Tobias will use some of his inheritance for the following purposes:

Gift to daughter
Tobias will make a cash gift of £100,000 to his daughter when she gets married on 29 March 2014. He has not made any previous lifetime gifts.

Required:
(c) Explain, with supporting calculations where necessary, the inheritance tax implications if Tobias makes a cash gift of £100,000 to his daughter when she gets married. (3 marks)

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Question 5Note 2

Afiya died  on 29 November 2012. She had made the following gifts during her lifetime:

(2) On 2 May 2011, Afiya made case gifts to her three nieces. The first niece was given £100, the second niece was give £200, and the third niece was given £400.

Required:
Which of these gifts will qualify for the small gifts exemption?

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