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The Technical Quiz: 3 July

Quiz

To help you keep up with the fundamentals of tax, retirement and financial planning, try answering these questions.

Question one

Tim made a transfer of some of his assets worth £400,000 to his wife Eliza during 2013/14. Eliza is a non-UK domiciled individual. How much of the transfer is chargeable to IHT at the time of the gift? 

A) None. It is a PET and therefore not chargeable to IHT during lifetime

B) The transfer of £400,000 is fully covered by the spouse exemption 

C) The lifetime tax payable is £400,000 less £325,000 non-UK domiciled spouse exemption, chargeable at 20 per cent 

D) The lifetime tax payable is £400,000 less £325,000 non-UK domiciled spouse exemption, covered by the nil-rate band

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Question two

Patience and Patrick have never made any lifetime transfers. Their daughter, Prudence, is to marry in 2014/15. To be exempt from IHT, what is the maximum total gift that Patience and Patrick together can make to Prudence?

A) £6,000

B) £11,000

C) £11,000

D) £22,000

 

Question three

On what occasions can holdover relief be claimed on capital gains?

A) On creation of a trust

B) On transferring an asset to a trust or the disposal of a business asset

C) On creation of a trust when a business asset has been transferred into the trust

D) On disposal of a business asset

Questions supplied by CPD Centre

For more help keeping up to date with your technical knowledge go to www.ifacpd.com

 

Scroll down for answers

 

 

 

 

 

 

 

 

 

Answers

1) A

2) D

3) B

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