Inheritance tax Lifetime transfers and Estate on death

Harry, a UK citizen, died on 20 December 2019 leaving an estate made up as follows:

His main residence valued at 825,000. The property had a 125,000 mortgage secured on it.

A Spanish holiday apartment valued at 150,000. This property had a 175,000 mortgage secured on it.

Bank balances of 420,000.

10,000 quoted shares in quoted company. The Stock Exchange Daily Official List (SEDOL) on the day of his death valued these as: 48p to 54p with marked bargains ranging between 47p to 55p.

Harry had taken out a life insurance policy on his own life. The policy was not written into trust for any other beneficiaries. Harrys estate received insurance proceeds of 125,000 following his death. Harry had contributed 80,000 into the policy during his lifetime and the policys value on the date of death was 120,000.

The following debts and liabilities were owed by Harry on his death: Household utility bills, tax liabilities, etc. 9,950. His funeral costs amounted to 8,000.

Harry had not made any lifetime transfers.

Harry was predeceased by his first wife, Jane, who died in 2015 and left her entire estate to Harry. She had not made any IHT transfers during her lifetime.

In his will Harry left everything to his friend, Jonathan.

Required

a. Calculate the value of Harrys estate for IHT purposes and the amount of Inheritance Tax payable on

b. State by whom and when the tax is payable and by whom it is borne.

c. Discuss the benefits of making lifetime transfers for IHT purposes and how such transfers can affect the tax on the estate at death.