Joseph did not make any lifetime transfers in the previous tax year. During 2020-21 he made the following gifts: 1. £12,000 to his daughter, Josie when she got married. 2. £9,000 to his son, Richard to buy a car. 3. £50,000 made to a trust for the benefit of a disabled person. 4. £3,000 to charity. 5. £500 to the Conservative Party. 6. £1,500 to his six grandchildren (£250 each). 7. £2,000 to his friend to pay off a bank loan.

Required: a) Identify each of the transfers as either an exempt, a potentially exempt (PET) or a chargeable lifetime transfer.

b) Calculate the value of potentially exempt transfers made in 2020-21.

8 The information below relates to part (c) of Question 6. Gemma and Patel were married. Patel died in 2015, leaving an estate valued at £300,000, to be split equally between his son and Gemma. He had made no lifetime gifts. The estate did not include a home. Gemma died in August 2020, leaving an estate valued at £950,000. Her will stated that £25,000 was to be left to a charity, and the balance of her estate to her son. Gemma had made one lifetime gift of £100,000 cash to her son in 2005. The estate included a home valued at £500,000.

Required: c) Calculate the inheritance tax payable on Gemma’s estate. (Show your workings clearly).

Answer rating: 100% (QA)

a 1 12000 to his daughter Josie when she got married a potentially exempt transfer PET Note As she r... View the full answer