Peter is an old man and does not have a good health. He is unfortunately expected to pass away in the near future. You should assume that todays date is 31 December 2019. The current value of his estate, and forecast value for the 12 months time, is:

Present value Forecast value 20,000 shares (1% holding) in Vista plc 50,000 45,000 8,000 shares (2% holding) in Sanne plc 70,000 85,000 30,000 shares (10% holding) in Alteo Ltd 65,000 60,000 Main residence 330,000 350,000 Buy-to-let holiday cottage 130,000 110,000 645,000 650,000

All of these assets have been owned for at least two years. The above companies are all trading companies. Under the terms of his will, Peter has left all of his assets to his son. His son had two children. Peters wife is also ill, and is not expected to love for more than three months. She does not have any assets of her own, but Peter is confident that his son will look after her upon his death. Peter has made the following transfers of value during his lifetime: (i) On 1 November 2010, he made a gift of 203,000 into a discretionary trust. The trust paid any IHT arising on the gift. (ii) On 1 October 2015, he gave his son 150,000 as a wedding gift. (iii) On 1 November 2015, he gave his son a business valued at 250,000. Peter had run the business for ten years, and his son has continued to run it since. Required: (a) Calculate the IHT liabilities that would arise if Peter were to die on 31 December 2019. Your answer should show the relevant due dates of payment. [10 marks] (b) Explain why it might be beneficial to change the terms of Peters will. If the changes were not made by Peter, explain whether it would be possible for his son to subsequently make the changes after the date of Peters death. [6 marks] (c) Peters son is considering selling the business that was given to him by his father for its current value of 175,000. Explain the IHT implications if the sale was before Peters death. [4 marks] (d) Explain: (i) The main advantages in lifetime giving for IHT purposes. (ii) The main factors that need to be considered in deciding which assets to gift. [10 marks]