Fletcher Francis, a 72 years old widower, has one child, Fiona Francis .Fletcher intends to leave the whole of her estate to Fiona on her death but wishes to make a lifetime gift to her on 1 June 2022. Fiona will sell the gift received from Fletcher immediately in order to enable her to purchase a second home overseas. Both Fletcher and Fiona are resident and domiciled in the UK. There are two possible gifts:

1. 6000 shares in Vauxhall UK Inc Vauxhall UK Inc is an unquoted trading company. Fletcher owns 20,000 shares in the company representing an 80% holding. Fletcher purchased the shares from a third party, such that investors relief will not be available. The 6,000 shares have an estimated market value of 650,000 and cost Fletcher 550,000 four years ago. The company owns land held as an investment which represents 8% of the value of its total assets and 12% of the value of its chargeable assets. This land is an excepted asset for the purposes of business property relief.

2. An expensive yacht worth 650,000 It cost Fletcher 400,000 in May 2016; a further 150,000 was spent in May 2017 installing new engines and navigation equipment.

Required

(a) Consider the IHT implications on the gift of shares made in Vauxhall UK Inc, and advise , if made:

(i) During lifetime gift (3 Marks)

(ii) via gift under Fletchers Will (i.e at Death) (3 Marks)

(b ) Consider the CGT Implications on the gift of shares made during lifetime with holdover relief claimed, and advise. (7 Marks)

(c) Consider the IHT implication on the gift of the expensive yacht, and advise, if made:

(i) During lifetime (3 Marks)

(ii) via gift under Fletchers will (i.e at Death) (3 Marks)

(d) Consider the CGT implication on the gift of the expensive yacht, and advise if made:

(i) During lifetime (3Marks)

(ii) via gift under Fletchers will (3 Marks)

UK Tax Rates and Allowances (Finance Act 2022) are to applied