3. David Klimot has contacted you following the death of his aunt, Irina Klimot, on 14 February 2019. Irina had never married and had no children. David is the sole beneficiary of the will.

David has supplied you with the following details: On 14 February 2019 Irina left assets with the following values:

Home in Devon Apartment in Bristol Personal chattels Cash ISA

Bank and building society accounts Antiques Car

425,000 290,000

11,100 27,400 45,850

3,800 13,500

Irina had an outstanding endowment mortgage of 120,000 on her home in Devon, unpaid credit card and other bills of 13,860 plus funeral costs of 3,520.

During her lifetime, Irina made the following gifts:

11 August 2010 3 May 2014

Required

Gross chargeable transfer

Cash gift into a discretionary trust for the benefit of Davids children. Irina agreed to pay any inheritance tax arising at that time.

300,000

40,000

(a) Calculate the lifetime inheritance tax payable by Irina on the gift into trust in

2014/15 and the due date of payment. (b) Calculate all the inheritance tax liabilities arising as a result of Irinas death

in 2018/19 and the due date of payment of death taxes.

(15 marks)

(c) Explain how a charitable legacy in a will can reduce inheritance tax payable. (4 marks) Total: (25 marks)

proforma for how to the answer is layed out

Name of donor Lifetime IHT on lifetime gifts E E E Ic IC Value of estate before gift Value of estate after gift Transfer of value Marriage exemption Annual exemption - CY -PY Chargeable amount NRB @ date of gift Less: GCTS