• All the calculations should be shown in a detailed way and also write explanations of the steps and the solution.

• All workings should be shown and made to the nearest month and pound unless the question requires otherwise, and a copy of Tax Summary Data FA 2019 is given.

(solve all the parts in the question)

a copy of Tax Summary Data FA 2019

Question 5: Andrew made the following lifetime gifts: (1) 23 October 2007 - A gift of 356,000 into a trust (2) 17 September 2013 - A gift of 47,000 to his nephew on the occasion of his marriage (3) 14 February 2015 - A gift to his wife of 100,000 (4) 26 August 2015 - A gift of 276,000 to a trust. Calculate the IHT payable on the lifetime transfers assuming that Nathan pays any IHT due on the first transfer into trust and the trustees pay any iHT due on the second transfer into trust. Clearly state who is responsible for paying the tax and the due date for payment. The nil rate bands are as follows: 2008/09 312,000 2013/14 onwards 325,000 (10 marks) (b) Nathan 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 Nathan had a life assurance policy on his own life from which the proceeds received were 105,000 Nathan 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 Nathan and the IHT on the death estate. Clearly state who is responsible for paying the tax, who suffers it and the due date for payment (10 marks) Total (20 marks) End of Question 5 Summary of Tax Data 40% Income Tax 2019-20 2018-19 TAX RATES AND BANDS Basic rate 20% 20% Higher rate 40% Additional rate 45% 45% Basic rate limit 37.500 34,500 Higher rate limit 150,000 150,000 Different tax rates and bands apply to the noe-savings income of Scottish taxpayers (see below) Starting rate for savings 0% 09 Starting rate limit for savings 5.000 5,000 Personal savings allowance (basic rate taxpayer) 1.000 1,000 Personal savings allowance (higher rate taxpayer) 500 Dividend ordinary rate 7.5% Dividend upper rate 32.5% 32.5% Dividend additional rate 38.1% 38.1% Dividend allowance 2,000 2,000 SCOTTISH TAX RATES AND BANDS Starter rate 19% 19% Basic rate 20% 20% Intermediate rate 21% 219 Higher rate 41% Top rate 46% 46% Starter rate limit 2,049 2,000 Basic rate limit 12.444 12.150 Intermediate rate limit 30930 31580 Higher rate limit 150,000 150,000 These tax rates and bands apply only to the non-savings income of Scottish taxpayers 500 7.5% 41% Summary of Tax Data PERSONAL ALLOWANCES 2018-19 11,850 1.190 2.390 2019-20 12.500 1.250 2.450 8.915 3.450 100.000 29,600 8.695 3.360 100,000 28,900 Personal allowance Marriage allowance Blind person's allowance Married couple's allowance: Born before 6 April 1935 Minimum amount Income limit for basic personal allowance Income limit for married couple's allowance CAR AND FUEL BENEFIT Not exceeding 50g/km 51g/km to 75g/km 76g/km to 94 g/km 95g/km Each additional Sg/km Maximum charge Amount used in car fuel benefit calculation PENSION SCHEMES Annual allowance Lifetime allowance 16% 199 229 23% +1% 375 24.100 134 165 194 20% +14 375 23.400 40.000 1.055.000 40,000 1030,000 Capital Allowances Writing Down Allowance (WDA) Main pool of plant and machinery 18% 185 Special rate pool of plant and machinery 84 Annual Investment Allowance (AIA) AIA annual limit from 1 January 2016 200.000 200.000 AIA rate 100% 100% First Year Allowance (FYA) Low emission cars 100% 100% Zero-emission goods vehicles 1005 100% Gas refuelling equipment 100% 100% Charging points for electric vehicles 100% 100% Energy saving or water efficient technology 1005 100% * AIA annual limit temporarily raised to /m between ! January 2019 and 31 December 2020 xil Summary of Tax Data 2019-20 118 166 962 166 962 2018-19 116 162 892 162 892 12% 29 12% 2% 13.8% 13.8% National Insurance Contributions CLASS 1 Lower earnings limit (weekly) Primary threshold (weekly) Upper earnings limit (weekly) Secondary threshold (weekly) Upper secondary threshold (weekly) Employee contributions Rate on carnings between primary threshold and UEL Rate on earnings beyond UEL Employer contributions Rate on carnings beyond secondary threshold CLASSIA Rate CLASS 2 Weekly contribution Small profits threshold CLASS 3 Weekly contribution CLASS 4 Lower profits limit Upper profits limit Rate on profits between lower and upper limit Rate on profits beyond upper limit 13.89 13.8% 3.00 6,365 2.95 6,205 15.00 14.65 8,632 50,000 956 29 8,424 46,350 99 2% Capital Gains Tax 2019-20 2018-19 Standard ratet 10% 10% Higher ratet 205 20% Entrepreneurs' relief rate 10% 109 Entrepreneurs' relief lifetime limit 10,000,000 10.000.000 Annual exempt amount 12.000 11.700 Taxable gains on the disposal of residential property are faxed at 18% and 289 xill