TAX Mock 2024

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ot tax payable in

to the trust?

During the tax year 2022/23, Mildred made four cash gifts to her grandchildren:

For each of the gifts listed below, click in the box to indicate whether the gift will be exempt

or not from inheritance tax under the small gifts exemption.

Opal is aged 71, and has a chargeable estate for inheritance tax (IHT) purposes valued at

She owns a property, which is her main residence. It is valued at €374,000 and has an outstanding

repayment mortgage of E160,OW. She also holds life insurance on her own life, currently valued at

E350,OOO, but which will pay proceeds of in the event of her death.

Opal owes E22• in respect of a personal loan from a bank, and she has also verbally promised

to pay legal fees of incurred by her nephew. Opal expects the cost of her funeral to be

E5,200, and this cost will be covered by the €6,000 vhich she has invested in an individual savings

account (ISA).

Under the terms of her will, Opal has left all of her estate to her children, Opal's husband is still

alive.

On 14 August 2012, Opal had made a gift of €100,000 to her daughter, and on 7 November 2022,

She made a gift Of to her son. Both these figures are after deducting all available

exemptions.

You should assume that both the value of Opal's estate and the nil rate band will remain unchanged

for future years.

What is the total net value for the and insurance policy, which will have been

in the calculation of Opal's chargeable estate?

• £816,OOO

• £564,000

• £656,000

• £724,000

Opal is aged 71, and has a chargeable estate for inheritance tax (IHT) purposes valued at

She owns a property, which is her main residence. It is valued at €374,000 and has an outstanding

repayment mortgage of E160,OW. She also holds life insurance on her own life, currently valued at

but which will pay proceeds of €442,0 in the event of her death.

Opal owes E22• in of a personal loan from a bank, and she has also verbally promised

to pay legal fees of incurred by her nephew. Opal expects the cost of her funeral to be

E5,200, and this cost will be covered by the E6,OOO vhich she has invested in an individual savings

account (ISA).

Under the terms of her will, Opal has left all of her estate to her children. Opal's husband is still

alive.

On 14 August 2012, Opal had made a gift of to her daughter, and on 7 November 2022,

she made a gift of E220,OOO to her son. Both these figures are after deducting all available

exemptions.

You should assume that both the value of Opal's estate and the nil rate band will remain unchanged

for future years.

Which TWO of the following amounts will have been deducted in calculating Opal's

chargeable estate?

• personal loan from a bank Of 22,400

• Promise to pay legal fees Of €4,600

• Funeral cost of €5,200

• ISA investment of €6,000

Opal is aged 71, and has a chargeable estate for inheritance tax (IHT) purposes valued at

She owns a property, which is her main residence. It is valued at £374,000 and has an outstanding

repayment mortgage of £160,000 She also holds life insurance on her own life, currently valued at

£350,OOO, but which will pay proceeds of £442,Ü in the event of her death.

Opal owes in respect of a personal loan from a bank, and she has also verbally promised

to pay legal fees of E4,cm incurred by her nephew. Opal expects the cost of her funeral to be

£5,200, and this cost will be covered by the €6,000 vhich she has invested in an individual savings

account (ISA).

Under the terms of her will, Opal has left all of her estate to her children. Opal's husband is still

alive.

On 14 August 2012, Opal had made a gift of f100,mO to her daughter, and on 7 November 2022,

she made a gift of £220,OOO to her son. Both these figures are after deducting all available

exemptions.

You should assume that both the value of Opal's estate and the nil rate band will remain unchanged

for future years.


What amount of IHT will be payable in respect of Opal's chargeable estate were she to die

on 20 March 2023?

• £210,000

• £298,000

• £338,000

• £295 600

Opal is aged 71, and has a chargeable estate for inheritance tax (IHT) purposes valued at

She owns a property, which is her main residence. It is valued at f374,000 and has an outstanding

repayment mortgage of €160,000. She also holds life insurance on her own life, currently valued at

E350,000, but which will pay proceeds of €442,000 in the event of her death.

Opal owes E22,400 in respect of a personal loan from a bank, and she has also verbally promised

to pay legal fees of f4,6m incurred by her nephew. Opal expects the cost of her funeral to be

E5,200, and this cost will be covered by the €6,000 which she has invested in an individual savings

account (ISA).

Under the terms of her will, Opal has left all of her estate to her children. Opal's husband is still

alive.

On 14 August 2012, Opal had made a gift of f100,mO to her daughter, and on 7 November 2022,

she made a gift of E220,OOO to her son. Both these figures are after deducting all available

exemptions.

You should assume that both the value of Opal's estate and the nil rate band will remain unchanged

for future years.

By how much would the IHT payable on Opars death be reduced if she were to live for

another seven years until 20 March 2030, compared to if she were to die on 20 March 2023?

• £88,000

• £40,000

• £128,000

• £0

Opal is aged 71, and has a chargeable estate for inheritance tax (IHT) purposes valued at

She owns a property, which is her main residence. It is valued at €374,000 and has an outstanding

repayment mortgage of €160,OOO. She also holds life insurance on her own life, currently valued at

€350,000, but which will pay proceeds of €442,000 in the event of her death.

Opal owes €22,400 in respect of a personal loan from a bank, and she has also verbally promised

to pay legal fees of f4,6m incurred by her nephew. Opal expects the cost of her funeral to be

€5,200, and this cost will be covered by the €6,000 which she has invested in an individual savings

account (ISA).

Under the terms of her will, Opal has left all of her estate to her children. Opal's husband is still

alive.

On 14 August 2012, Opal had made a gift of €100,000 to her daughter, and on 7 November 2022,

she made a gift of €220,OOO to her son. Both these figures are after deducting all available

exemptions.

You should assume that both the value of Opal's estate and the nil rate band will remain unchanged

for future years.

Which TWO of the following conditions must be met if Opal wants to make gifts out of her

income, so that these gifts are exempt from IHT?

• The gifts cannot exceed 10% of income

• The gifts must be habitual

• Opal must have enough remaining income to maintain her normal standard Of living

• Opal must make the gifts monthly or quarterly