TX- Inheritance TAX

Laurence made a gross chargeable transfer of £222,000 on 30 August 2019.

Laurence gifted £180,000 to a trust on 28 February 2025, opting to pay the tax himself.

How much lifetime IHT is payable on the gift to the trust on 28 February 2025?

• 1. £19,250

• 1. £17,750

• 1. £14,200

• 1. £15,400

Simba made a gift of £400,000 to a trust on 30 June 2020. This was his only lifetime gift, and Simba paid the lifetime IHT of £17,250 on the gift. The gross chargeable transfer was £411,250.

Simba died on 31 March 2025.

What is the additional IHT arising on the lifetime gift as a result of Simba’s death?

• 1. £3,450

• 1. £17,250

• 1. £20,700

• 1. £34,500

What is the value of Justin’s chargeable estate?

• 1. £838,000

• 1. £338,000

• 1. £336,000

• 1. £341,000

Renton and Edna were a married couple. Renton died on 31 March 2019 and left the majority of his estate to Edna, and £130,000 to their daughter Grace.

Edna died on 3 April 2025, leaving her estate worth £1,200,000 to their daughter Grace, including her private residence valued at £300,000.

How much nil rate band will be available on Edna's death?

• 1. £950,000

• 1. £1,000,000

• 1. £820,000

• 1. £870,000

Lily wishes to make gifts to her grandchildren, Tom and Patrick rather than her daughter Kim.

Why might this be beneficial for inheritance tax (IHT) purposes?

• 1. To avoid a potential double charge to IHT

• 1. To maximise the use of the nil rate band

• 1. To reduce the rate of IHT

• 1. Because there is a greater chance of the gift becoming exempt

Katrina made a gift of 3,000 £1 ordinary shares in CTS Ltd, an unquoted investment company. CTS Ltd has 20,000 £1 ordinary shares in issue. Before the transfer Katrina owned 11,000 of these shares. The shares are worth £18 each for a holding of 15%, £24 each for a holding of 40%, and £37 each for a holding of 55%.

What value has been transferred by Katrina in making the gift?

• 1. £215,000

• 1. £72,000

• 1. £111,000

• 1. £54,000

On 1 August 2024 Amanda made a gift to a trust of £550,000 (after deducting available exemptions).

Amanda will pay the inheritance tax arising from the gift. She has not made any previous lifetime gifts.

What is Amanda’s lifetime inheritance tax liability in respect of the gift?

• 1. £45,000

• 1. £56,250

• 1. £90,000

• 1. £137,500

Margaret died on 12 March 2025 leaving an estate valued at £450,000. On 12 July 2017 Margaret had made a gift of £15,000 to her daughter, and on 27 December 2019 she had made a gift of £75,000 to her son.

These figures are after deducting available exemptions. Her estate is left equally between her two children and includes her main residence, valued at £350,000.

What is the inheritance tax liability in respect of Margaret’s estate?

• 1. £16,000

• 1. £10,000

• 1. £80,000

• 1. £180,000

Ben died on 14 February 2025. When his wife, Bella, died on 13 September 2008, only 35% of her nil rate band of £312,000 for the tax year 2008-09 was used. Ben and Bella did not have any children.

How much nil rate band may be claimed by Ben’s personal representatives on his death?

• 1. £325,000

• 1. £527,800

• 1. £536,250

• 1. £637,000

On 14 July 2023 Ray made a gift of £5,000 to his daughter, Wanda. On 17 October 2024 he made another gift of £6,700 to Wanda.

What is the value of the potentially exempt transfer to Wanda made on 17 October 2024?

• 1. £700

• 1. £2,700

• 1. £3,700

• 1. £6,700