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Tax Notes

LPC Law Notes > Private Client Notes

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A more recent version of these Tax notes – written by Cambridge And Oxilp And College Of Law students – is available here.

The following is a more accessble plain text extract of the PDF sample above, taken from our Private Client Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

Elective: Private Client

TAX:

1. Inheritance Tax [IHT] Checklist

IHT payable when the gift was made:

1. Does the gift carry with it any liability [e.g. mortgage / charge on shares]

2. Exemptions:

*
spouse 100%

*
charity 100%

*
political party 100%

*
Business property relief

*
small gifts

*
normal expenditure

*
marriage

3. 4.

5. 6. PET

Annual exemptions [check dates]
Equals = Value of the PET / LCT Gross up any LCT if donor is paying tax. TAX: No IHT payable The PET is ignored while Peggy is alive The value of the PET does not affect the Cumulative Total

LCT 1

*

*

LCT 2

*

NRB Option 1: "The LCT1 made more than 7 years before LCT 2. The PET is ignored therefore the whole NRB is available [check NRB table of that year]"

*

NRB option 2: "The LCT1 was made in the last 7 years before LCT2 therefore it effects the NRB available. The NRB is now [NRB of this year - cumulative total]"

*

*

NRB in the YEAR of the gift [check table]
Tax at 20% if it exceeds the NRB

NB. No taper relief at this stage Valuation issues? [10% discount]

IHT payable on LCTs / PETs at date of death:

1. Transferable NRB?

2. "x dies on DATE. The 7 year period runs from DATE"

3. NRB transferable- transfer the appropriate % proportion not used

4. Work chronologically:

1

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