IHTM14000 - Lifetime transfers: contents
Introduction
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Introduction |
Basis of valuation
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Summary |
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Burden of tax |
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Treatment of expenses |
Investigating form IHT403
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Practice |
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Mandatory referrals |
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Considering further gifts |
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Potentially exempt transfers |
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Gifts with reservation |
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Earlier chargeable transfers |
Investigating IHT100
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Introduction |
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IHT100a |
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IHT100b |
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Considering further gifts |
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Excepted transfers |
Specific lifetime exemptions
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Summary |
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Order in which exemptions apply |
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Specific lifetime exemptions: small gifts exemption |
Annual exemption
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Summary |
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Relievable property |
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Multiple transfers |
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Roll over provisions |
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Schemes to exploit annual exemption |
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Settled property requirement |
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Annual exemption: Schemes to exploit annual exemption - Introduction |
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Transfer by sale |
Annual exemption: Schemes to exploit annual exemption: Transfer of part of a property
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Summary |
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Transfer of sum of money |
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Transfer of share equal to a sum of money |
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Transfer of shares quantified by loss in value |
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Split proceeds from property on trust for sale |
Gifts in consideration of marriage or registration of civil partnership
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Summary |
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Practice |
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Permissible beneficiaries for s.22 purposes |
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Rennell |
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IHTA restrictions of Rennell |
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Relationship with spouse or civil partner exemptions |
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Termination of IIP in settled property |
Gifts in consideration of marriage: Rennell
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Summary |
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Gifts by way of settlement |
Gifts in consideration of marriage or civil partnership: IHTA restrictions of Rennell
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Outright gifts and other dispositions |
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The eventual recipient |
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IHTA84/S22 (4)(b) provisions |
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Payments under covenant |
Normal expenditure out of income
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Introduction |
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Considering the gifts (chart) |
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Considering the exemption (chart) |
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Practice |
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Life policy linked with an annuity |
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Loans made prior to 6 April 1981 |
Normal expenditure out of income: Normal expenditure
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Considerations |
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Pattern of gifting |
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Case Law - Bennett v IRC |
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Test of normality |
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Out of income |
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Transferor's standard of living |
Gifts With Reservation
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Requirements for a GWR |
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Identifying and investigating a GWR |
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Devolution of GWR property |
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Interests in land |
The gift
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Initial requirements |
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The donor |
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The property given |
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Examples of the property given |
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Defining the gift |
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Sales for less than full consideration |
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Interest free loans |
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Exempt transfers which cannot be GWRs |
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Exempt transfers which can be GWRs |
The reservation
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Initial requirements |
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Possession and enjoyment by the donee |
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Exclusion of the donor |
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Examples of exclusion of the donor |
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Non-exclusion need not be continuous |
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Effect of consideration |
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Continuation of reasonable commercial arrangements |
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Benefit by associated operations |
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Benefit to donor's spouse or civil partner |
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When occupation is not a reservation |
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Full consideration in cases of land and chattels |
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Infirm relative |
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Annual exemption |
Tracing
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Introduction |
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Absolute gifts of cash |
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Absolute gifts of property other than cash |
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Supplementary provisions |
Settled property
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Introduction |
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The donee and the property given |
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Settlement on discretionary trusts |
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Donor also a trustee |
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Reasonable commercial arrangements |
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Domicile of the settlor |
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Tracing settled property |
Settled property: Tracing settled property
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The property comprised in the gift |
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If the property ceases to be settled |
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Settlement by the donee |
Insurance policies
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Introduction |
Insurance policies: Gifts to which the GWR rules can apply
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General gifts after 18 March 1986 |
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Normal out of income exemption on regular premiums |
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Policies made before 18 March 1986 |
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Automatic increases in policy value |
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Change in life assured |
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The property given |
Insurance policies: The reservation
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Introduction |
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Special rule for policies with linked benefits |
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Reservation examples |
How lifetime transfers are brought into the charge for tax
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Cumulation and calculating the tax (chart) |
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Cumulation |
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Cumulation with the death estate |
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GWRs |
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Simultaneous/ same day transfers |
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Liability for payment of tax |
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Grossing-up the values |
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Explaining tax calculations |
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Late reported transfers |
PETs
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Tax treatment of a PET |
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Tax treatment of a PET followed by death |
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Cumulation |
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Cumulating transfers more than seven years before death |
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IHT threshold |
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Rate of tax |
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Taper relief |
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Fall in value relief |
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Special rate |
Immediately chargeable transfers
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Introduction |
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Value for tax |
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Cumulation |
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Rate of tax |
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Grossing |
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Late reported transfers |
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Death subsequent to the transfer |
Immediately chargeable transfers: Grossing
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When to gross-up |
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When not to gross-up |
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Partial grossing |
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The grossing calculation |
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Tax paid after death of the transferor |
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Settled property |
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Authority for grossing |
Additional charges
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Introduction |
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Value for tax |
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Cumulation |
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Rate of tax |
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Taper relief |
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The additional tax payable |
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The additional tax payable (example 1) |
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The additional tax payable (example 2) |
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Business/agricultural relief |
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Fall in value relief |
Specific lifetime reliefs
Taper relief
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When the relief applies |
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Quantifying the relief |
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Period of survival |
Fall in value relief
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Introduction |
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Form of the relief |
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Considering the claim for relief (chart) |
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Conditions for relief |
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What is a qualifying sale? |
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What is market value? |
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The claim |
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Wasting assets |
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Portfolio of assets |
Shares and securities
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Adjustments |
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Capital receipts |
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Payment of calls |
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Changes in shareholdings |
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Transactions of close companies |
Interests in land
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Changes between transfer and death |
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Depreciatory changes |
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Appreciatory changes |
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Compensation |
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Leases |
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Other property |
Double charges relief
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When double charges arise |
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Applying the relief |
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Authority for the relief |
PETs
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When double charges relief arises |
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Partial consideration |
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Property representing the property transferred |
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Calculations |
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QSR |
GWRs
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When double charges relief arises |
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Calculations |
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Example of calculations 1 |
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Example of calculations 2 |
Disallowed debts
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When double charges relief arises |
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Calculations |
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Transfers chargeable when made |
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Calculations producing the same amount |
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Discretionary trusts |
Investigation issues
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Introduction |
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Possible omissions of lifetime transfers |
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Omission to exercise a right |
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Voidable transfers |
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Donatio mortis causa (DMC) |
Associated operations
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Why are the provisions necessary? |
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Definition |
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The objective test |
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The subjective test |
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Additional provisions |
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Definition of terms |
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Transfer of value made by associated operations |
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Restrictions on association |
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Re Macpherson |
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Insurance policies |
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Gifts With Reservation |
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Transfers involving relievable property |
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Gifts between spouses or civil partners |
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Sale without immediate payment of the purchase price |
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Transfer in stages |
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Successive settlements |
Transfers by close companies
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Introduction |
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Transfers of value |
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Exemptions |
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Foreign aspects |
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Alterations in share capital, loan capital or rights |
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Liability to tax |
Future payments
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Introduction |
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Calculating the chargeable portion |
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Exemptions |
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Payments outstanding at death |
Dating of dispositions
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Introduction |
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Gifts by cheque |
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Dispositions affecting land |
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Chattels/corporeal moveables |
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Choses in action/incorporeal moveables |
