The following scenario relates to questions 16-20.Jeffrey died on 11 January 2023. At death his estate comprised chattels, quoted shares and cashvalued at £1,580,000. Jeffrey had a life insurance policy which was valued at £250,000 on his death.The insurance proceeds paid to the executors of his estate were £375,000. At death Jeffrey owedunpaid income tax and capital gains taxes amounting to £24,000 and his funeral expenses were£7,000.On 8 September 2017 Jeffrey had made a lifetime gift of £500,000 into a trust. The tax arising waspaid by Jeffrey. This was his only lifetime transfer.Jeffrey's wife, Stella, had died in June 2008. 20% of her nil rate band was unused and thereforeavailable to be claimed by Jeffrey's personal representatives after his death.16.What amount of inheritance tax would have been payable in respect ofJeffrey's lifetime gift into trust? (Ignore any exemptions which may have beenavailable.)£Nil rate bands:2008-09£312,0002009-10 onwards£325,000

The objective of the question is to calculate the amount of inheritance tax that would have been…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Trevor died on 19 June 2020 leaving an estate valued at £720,000. Under the terms of his will, Trevor’s estate was left to his children. The estate included a main residence valued at £300,000. Trevor’s wife died on 5 May 2009. She used all of her nil rate band of £325,000. Find Out Inheritance Tax.
Hetty died in June 2020 leaving £20,000 to her son George and the £100,000 remainder of her estate to her husband Harold.   Harold had gifted £18,000 to George in May 2018. Harold dies on 6 June 2021 leaving his entire estate to George. The estate comprised the Harold’s home, a small flat valued at £170,000, and other assets worth £680,000, giving a total estate value of £850,000.   The IHT NRB for 2020-21 was £325,000.   No other lifetime gifts were made. Required:  Calculate the IHT liability on Harold’s death, showing your workings, and state the payment date for IHT.
Mr. Sadiq died on 5 May 2020, leaving an estate comprising: 10,000 ABC plc shares, valued at £24,400 wife Main residence worth £350,000 Son Investment property valued at £84,000 Daughter 1,000 XYZ Investment Ltd shares valued at £68,000 Mr Sadiq had an outstanding unsecured loan of £5,750 to his bank at the time of his death. Mr. Sadiq left a will directing that his wife should take the ABC plc shares, the main residence should go to his son and the rest of his estate should go to his daughter. He had made one gross chargeable transfer during his lifetime in 2014 of £232,000. Required Show the IHT payable on Sadiq's estate.
Diego died on 20 November 2021. His first lifetime gift on 4 May 2015 was to a trust and this resulted in a gross chargeable transfer of £360,000. This is after deducting all available exemptions. On 6 March 2017, Diego made a gift to his grandson of 5,000 out of the 14,000 £1 ordinary shares he owned in Pedazo Ltd, an unquoted investment company. This was a wedding gift on the occasion of his grandson's marriage. Pedazo Ltd has an issued share capital of 20,000 £1 ordinary shares. On 6 March 2017, each share in a majority holding (over 50%) was worth £12.50, and each share in a minority holding (50% or less) was worth £8.70. On 8 January 2019, Diego gave some antique furniture to his granddaughter. The furniture was valued at £58,000 at the date of the gift. Diego's assets at the date of his death were valued at £798,700. His funeral expenses amounted to £3,700. Under the terms of his will, Diego left £655,000 to his wife, a specific legacy of £100,000 to his daughter, and the residue…
On 23 August 2015, Peter made a gift of a house valued at £420,000 to his son, John. This was a wedding gift when John got married. The nil rate band for the tax year 2015/16 is £325,000.PeterPeter died on 20 March 2021 at which time his estate was valued at £880,000. Under theterms of his will, Peter divided his estate equally, before inheritance tax, between his wife and his son, John. Peter had not made any gifts during his lifetime except for the gift of the house to John. Peter did not own a main residence.JohnJohn sold the house which he received as a wedding gift from Peter, his father, on 5April 2021. The following information relates to the property: Net sale proceeds after costs of disposal £496,400Cost of new boundary wall around the property (there was previously no boundary wall) £(5,200)Cost of replacing the property’s chimney £…
In 2020-21, Ahmed has capital gains of £130,000 and allowable losses of £24,000. Ha also has capital losses brought forward of £3,700. 17.9 Ahmed's taxable income for 2020-21 (after deduction of the personal allowance) i £22,500. He makes Gift Aid donations of £8,000 during the year. Compute his CGT liability for the year assuming that his gains of £130,000 comprise either: (a) a gain of £120,000 which qualifies for business asset disposal relief (BADR) and non-BADR gain of £10,000 on the disposal of chattels, or (b) a BADR gain of £10,000 and a non-BADR gain of £120,000 arising on the disposa of residential property, or (c) a BADR gain of £7,500, a non-BADR gain of £70,000 on the disposal of residentian property and a non-BADR gain of £52,500 on the disposal of shares.
(b) Andrew died on 30 November 2019 leaving an estate comprising of his main residence valued at £500,000 upon which there was an interest only mortgage of £150,000 outstanding on this property In addition, he owned: Quoted shares in various companies valued at £120,000 Paintings valued at £205,000 Motor cars valued at £50,000 Building society accounts of £36,000 Andrew had a life assurance policy on his own life from which the proceeds received were £105,000. Andrew had credit card debts of £2,500 and had also verbally promised to pay the £1,000 legal fees of a friend. Funeral expenses amounted to £5,000. Under the terms of his will, he left £100,000 to his wife, £20,000 to his niece and the residue of the estate to his nephew. Using the information from the part (a), calculate the IHT as a result of death on the lifetime gifts made by…
Shezan made a gross chargeable lifetime transfer of £305,000 in January 2014. He also transferred £1,900 to his friend Stevenson in January 2018. In August 2018, he makes a transfer of £390,000 to a trust for the benefit of his grandchildren. The trustees (donee) pay the tax arising from the gift. How much lifetime inheritance tax will be payable in respect of his gift of £390,000? Shezan has not paid any tax on the gift made in January 2018 since it was covered by the annual exemption for the tax year 2017/18.
Becky purchased a P1,500,000 life insurance policy for P100,000. During the year, Becky died and her heirs collected the entire proceeds. How much of the proceeds is exempt from from income tax?
Allan left the following bank deposits upon his death: - A bank- 1,000,000 - B bank- 2,000,000 - C bank- 3,000,000 How much is the amount to be reported as part of gross estate assuming the heirs of allan opted for final tax?
Charles Kamp, a divorced person, died in February of the current year with an estate consisting of assets valued at $7,008,000 and liabilities of $380,000. Charles’s will contained the following provisions:a. Robert Sullivan would serve as executor of the estate and trustee for the Kamp Children Trust.b. Timberland with a market value of $560,000 would be placed in a charitable remainder trust. The income from the trust would accrue to the benefit of his sister Marsha Kamp Rodriquez. Income would be reduced by the depletion charge associated with the number of board feet of lumber harvested.c. Securities with a value of $25,000 would be given to the Milwaukee Art Museum, recognized as a charitable organization.d. Securities with a value of $600,000 would be given to his married daughter, Maria Kamp Wilson.e. Each of his three best hunting friends would be paid $200,000 from the proceeds of the sale of Charles’s investment in hunting land in Alaska. The hunting land was valued at…
In 2020/21 Clive had taxable income (after deducting the personal allowance) of £33,000 and he made the following disposals in the year:i) In May 2020 he sold part of a set of silver cutlery that was originally acquired in March 2014 for £19,000 and costs of acquisition were £500. He received proceeds of £25,400. The market value of the remaining cutlery was £29,000.ii) In June 2020 he sold a painting for net proceeds of £5,100. He had bought the painting for £12,250 in July 2015.iii) In July 2010 he had acquired a 25-year copyright at a cost of £60,000. In July 2020 he sold the copyright for £71,000.iv) In August 2020 he sold 1,900 shares in Glug plc for £7.20 each. His shareholding in Glug plc was acquired as follows:• May 2013 - purchased 1,800 shares at a cost of £2.20 each.• April 2015 – there was a 1 for 10 rights issue by Glug plc at £1.90 pershare and Clive acquired all the shares to which he was entitled.• October 2017 - purchased 3,500 shares at a cost of £3.15 each.v) In…

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