3. Simon died on 1st March 2020, aged 80. His executors have approached you for assistance in calculating the inheritance tax payable as a result of his death. Lifetime Gifts: Simon made the following lifetime gifts: i. Land worth 380,000 into a discretionary trust on 10 December 2011. ii. 100,000 cash gift to grandson on occasion of marriage on 18 June 2015 iii. 10,000 units in the Jaxon Unit Trust to his daughter on 12 March 2016. The unit trust was quoted at 2018p-2025p, per unit, on that day. iv. 200,000 cash to his son on 5 April 2019. Death Estate: At the date of his death, Simon had the following assets: i. Family home, valued at 920,000. At death, there was an outstanding mortgage on the property of 242,000. ii. Personal chattels valued at 140,000. iii. Cash deposits and investments totalling 80,000. 5R6Z0039_2021_R Page 7/11 iv. 20,000 shares in Perry Plc, a quoted company. At the date of death, the shares were quoted at 910p-926p, with marked bargains of 900p, 908p, 915p and 925p. Question 3 continues on the next page Question 3 continued At the date of death, Simon had outstanding unsecured debts of 20,000. His funeral cost 15,000. Legacies: In his will, Simon left the cash and investments to his wife, 4,000 to charity, and the remainder of his assets to his children in equal share. Required: (a) Calculate the Inheritance Tax that will be payable as a result of Simon's death, stating when it will be payable and by whom. (20 marks) (b) "Inheritance Tax is probably the most unfair of all the taxes in the UK tax system; however, it is so easy to avoid paying it that it may as well just be described as a 'voluntary levy'!" Critically discuss the above statement. (5 marks) (Total 25 marks 3. Simon died on 1st March 2020, aged 80. His executors have approached you for assistance in calculating the inheritance tax payable as a result of his death. Lifetime Gifts: Simon made the following lifetime gifts: i. Land worth 380,000 into a discretionary trust on 10 December 2011. ii. 100,000 cash gift to grandson on occasion of marriage on 18 June 2015 iii. 10,000 units in the Jaxon Unit Trust to his daughter on 12 March 2016. The unit trust was quoted at 2018p-2025p, per unit, on that day. iv. 200,000 cash to his son on 5 April 2019. Death Estate: At the date of his death, Simon had the following assets: i. Family home, valued at 920,000. At death, there was an outstanding mortgage on the property of 242,000. ii. Personal chattels valued at 140,000. iii. Cash deposits and investments totalling 80,000. 5R6Z0039_2021_R Page 7/11 iv. 20,000 shares in Perry Plc, a quoted company. At the date of death, the shares were quoted at 910p-926p, with marked bargains of 900p, 908p, 915p and 925p. Question 3 continues on the next page Question 3 continued At the date of death, Simon had outstanding unsecured debts of 20,000. His funeral cost 15,000. Legacies: In his will, Simon left the cash and investments to his wife, 4,000 to charity, and the remainder of his assets to his children in equal share. Required: (a) Calculate the Inheritance Tax that will be payable as a result of Simon's death, stating when it will be payable and by whom. (20 marks) (b) "Inheritance Tax is probably the most unfair of all the taxes in the UK tax system; however, it is so easy to avoid paying it that it may as well just be described as a 'voluntary levy'!" Critically discuss the above statement. (5 marks) (Total 25 marks