Assume the following Retail Price Indices (RPIs):

October 2013	251.9
December 2017	278.1

Question 2

Thomas was married to Kim, until her death in March 2008. The couple had two sons, Bill and Ben. Kim had never made any lifetime gifts but in her will she left her two sons 100,000 each and the balance of her estate was inherited by Thomas.

Thomas died on 22 June 2019. He made the following gifts during his lifetime:

12 June 2008	Cash as a wedding gift to Bill	14,000
23 March 2010	Cash gift to a trust	334,000
14 July 2012	Further cash gift to the trust	100,000
10 May 2013	Cash gift to niece	8,000

Thomas paid any lifetime inheritance tax due on the above lifetime gifts.

At the time of his death, Thomas owned the following assets:

1. 100,000 1 ordinary shares in Hospice plc, a quoted trading company. Hospice plcs shares were valued at 242.5p to 250.5p for that day.
2. The family home, valued at 1,200,000
3. Bank and cash balances of 150,000
4. A life insurance policy, which provided proceeds of 88,000 to his estate on his death.

Thomas only outstanding debts were his funeral expenses of 6,500.

Under the terms of his will, Thomas left 200 to each of his two god- children, a 10,000 donation to OXFAM (a UK charity) and the residue of his estate was left equally to his children.

YOU ARE REQUIRED TO:

1. Calculate the amounts of inheritance tax which would have been paid on the lifetime gifts, stating the due dates where relevant, and explaining the treatment of each gift made during Thomas life.

(11 marks)

2. Calculate the amount of inheritance tax which becomes payable as a result of Thomas death, stating the due dates for payment of the inheritance tax and by whom the inheritance tax is payable.

(19 marks)

The nil rate bands are as follows:

2007/08 was 300,000

2008/09 was 312,000

2009/10 onwards it has been 325,000