IHT - question approach and question

In this lesson

1. 0:00 Lifetime transfers question approach
2. 0:13 Valuing transfers and diminution principle
3. 0:24 Allocating exemptions chronologically
4. 0:44 Calculating lifetime IHT on CLTs
5. 1:14 Understanding donor and donee rates
6. 1:43 Worked example: Stewart's lifetime gifts
7. 3:00 Gift to trust: CLT calculation
8. 3:41 Gift to daughter: PET treatment
9. 4:13 Gift to trust: Using nil rate band
10. 5:45 Key takeaways and revision tips

About this lesson

You'll discover why chronological order matters, how to apply annual exemptions correctly, and how to calculate lifetime inheritance tax on chargeable lifetime transfers—including the crucial distinction between how pets and other gifts affect your nil rate band. By working through a detailed example involving multiple gifts to trusts and family members, you'll gain confidence tackling similar questions on your taxation papers and understand the methodology you'll need when these transfers are reassessed on death. The lesson covers the five-step question approach: work through gifts in the order they happened, value each transfer using the diminution in value principle, allocate annual exemptions chronologically, calculate lifetime IHT on chargeable lifetime transfers by considering the nil rate band available and any CLTs in the previous seven years, and finally calculate the gross chargeable transfer figure. You'll see how to apply donor quarter (20/80) when the donor pays the tax, and why pets are treated differently—they use annual exemptions but never touch your nil rate band during lifetime. The worked example shows you how to track your nil rate band across multiple gifts and why drawing a seven-year timeline can help you spot which earlier transfers affect your current calculation.

Duration: 7m