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CELE SQE1 模拟练习

Examination Timing: 00H00M47S

A man died in December 2023. He made three lifetime gifts only, which were all to his son, to help with the cost of repairs to the son’s house. The gifts were as follows: May 2017: £3,000 July 2018: £4,000 August 2020: £7,000 What is the man’s cumulative total for Inheritance Tax purposes at the date of his death?

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For Inheritance Tax (IHT) purposes, lifetime gifts made within seven years of death may be subject to IHT if they exceed the annual exemption. The annual exemption allows for up to £3,000 of gifts each tax year to be exempt from IHT. If the exemption is not used in one tax year, it can be carried forward to the next tax year, but only for one year. May 2017: £3,000 - This gift is fully covered by the annual exemption for the tax year 2017/18, so it does not count towards the cumulative total. July 2018: £4,000 - The £3,000 annual exemption for the tax year 2018/19 covers part of this gift. The remaining £1,000 is not covered and counts towards the cumulative total. August 2020: £7,000 - The £3,000 annual exemption for the tax year 2020/21 can be applied. The remaining £4,000 is not covered and counts towards the cumulative total. Adding the amounts not covered by the annual exemptions: July 2018: £1,000 August 2020: £4,000 Total cumulative amount for IHT purposes: £1,000 + £4,000 = £5,000 Therefore, the correct cumulative total is £5,000. 


Key Point: When calculating the cumulative total for IHT purposes, apply the annual exemption to each gift. Any amount exceeding the exemption within the relevant tax year counts towards the cumulative total for the seven years before death.

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