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