Question 4 4.1 Tony is UK resident and UK domiciled for tax purposes. He made the following disposals in 2019/20: On 20 September 2019 Tony sold a painting to his brother, Peter, for 25,000 despite it being worth 30,000. He had inherited the painting from his aunt in January 1998 when it was worth 50,000. On 31 December 2019 Tony sold some shares in an unquoted investment company for 60,000 realising a gain of 20,000. On 5 February 2020 Tony sold a 14% shareholding in Penny Ltd, an unquoted trading company, to his other brother John for 35,000. At that date the shares were worth 65,000. He had acquired the shares in August 2005 for 10,400. Tony has worked for Penny Ltd for three years. On 21 February 2020 Tony sold a vintage car for 49,000 which he had bought in June 2000 for 35,000. On 1 April 2020 Tony gifted his wife, Joanne, a necklace which he had also inherited from his aunt. It was worth 10,000 when he inherited it in 1998 and is worth 22,000 when gifted to Joanne. Tony had employment income of 50,000 in 2019/20. Requirement Calculate the after tax cash available to Tony from his disposals in 2019/20. (10 marks) 4.2 Noah is UK resident and UK domiciled. Noah was the sole beneficiary of his wife Emmas will when Emma died in August 2014. No lifetime gifts have been made by either Emma or Noah. Noah is in poor health, he is not expected to live for more than four years. Noah owns the following assets with current market values as stated: His home in London worth 450,000. A vintage car valued at 37,000. Personal chattels and cash balances of 224,000. Gateway House, a commercial property, worth 700,000. Noah is considering giving Gateway House to his nephew Gerry in November 2020 to reduce the inheritance tax payable on his death. 4,000 shares in Chalk plc, an investment company, quoted at 208-214p, with marked bargains of 201p, 209p and 219p. The value of all assets is expected to remain the same for the next four years with the exception of Gateway House and Noah's home in London. These are both expected to stay at the same value for the rest of 2019 and 2020, but will increase in value by 10% by March 2024. On his death, Noah will leave his estate to his nephew Daniel. Requirement Assume Noah dies in March 2024. Noah is considering two options: Option 1: Noah makes the lifetime gift of Gateway House to Daniel in November 2020 or alternatively; Option 2: Does not make the lifetime gift and still owns Gateway House at his death in March 2024, Calculate the inheritance tax payable as a result of his death under each option. Show your death estate calculations in two columns 'lifetime gift' and 'no lifetime gift'. (14 marks)

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Question 4 e 4.1 Tony is UK resident and UK domiciled for tax purposes. He made the following disposals in 2019/20:- On 20 September 2019 Tony sold a painting to his brother, Peter, for 25,000 despite it being worth 30,000. He had inherited the painting from his aunt in January 1998 when it was worth 50,000.- On 31 December 2019 Tony sold some shares in an unquoted investment company for 60,000 realising a gain of 20,000.- On 5 February 2020 Tony sold a 14% shareholding in Penny Ltd, an unquoted trading company, to his other brother John for 35,000. At that date the shares were worth 65,000. He had acquired the shares in August 2005 for 10,400. Tony has worked for Penny Ltd for three years. On 21 February 2020 Tony sold a vintage car for 49,000 which he had bought in June 2000 for 35,000. On 1 April 2020 Tony gifted his wife, Joanne, a necklace which he had also inherited from his aunt. It was worth 10,000 when he inherited it in 1998 and is worth 22,000 when gifted to Joanne. Tony had employment income of 50,000 in 2019/20.- Requirement Calculate the after tax cash available to Tony from his disposals in 2019/20. (10 marks) 4.2 Noah is UK resident and UK domiciled. Noah was the sole beneficiary of his wife Emma's will when Emma died in August 2014. No lifetime gifts have been made by either Emma or Noah. e Noah is in poor health, he is not expected to live for more than four years. Noah owns the following assets with current market values as stated:- His home in London worth 450,000.- A vintage car valued at 37,000.- Personal chattels and cash balances of 224,000.- Gateway House, a commercial property, worth 700,000. Noah is considering giving Gateway House to his nephew Gerry in November 2020 to reduce the inheritance tax payable on his death. 4,000 shares in Chalk plc, an investment company, quoted at 208-214p, with marked bargains of 201p, 209p and 219p. The value of all assets is expected to remain the same for the next four years with the exception of Gateway House and Noah's home in London. These are both expected to stay at the same value for the rest of 2019 and 2020, but will increase in value by 10% by March 2024. On his death, Noah will leave his estate to his nephew Daniel. Requirement- Assume Noah dies in March 2024. Noah is considering two options: Option 1: Noah makes the lifetime gift of Gateway House to Daniel in November 2020 or alternatively; Option 2: Does not make the lifetime gift and still owns Gateway House at his death in March 2024, Calculate the inheritance tax payable as a result of his death under each option. Show your death estate calculations in two columns 'lifetime gift' and 'no lifetime gift'. (14 marks) Question 4.14 Actual sale proceeds Less CGT After tax cash available WORKINGS (1) (2) 7 (3) (4) - (5) Capital gains tax payable- Qualifying for ER Not qualifying for ER 1 1 1 t 1 T. Less annual exempt amount Gain CGT: t t T. Question 4.24 -Death Estate March 2024- Gift No gift ttt tt Gateway House- 1. 11. 1. Home e t T. Care -Chattelse Sharese C ttttt T tttttttt Total estate -Less nil rate band t t' T -IHT @ 40% T. T. 1 tt 1 . C IHT on lifetime gift (W) Total IHT payable on death T. WORKING Lifetime gift - tax on death Gateway House Less annual exemptions - - tttttt 1.1.1 Less nil rate bande f x 40% IHT after taper relief Question 4 4.1 Tony is UK resident and UK domiciled for tax purposes. He made the following disposals in 2019/20: On 20 September 2019 Tony sold a painting to his brother, Peter, for 25,000 despite it being worth 30,000. He had inherited the painting from his aunt in January 1998 when it was worth 50,000. On 31 December 2019 Tony sold some shares in an unquoted investment company for 60,000 realising a gain of 20,000 On 5 February 2020 Tony sold a 14% shareholding in Penny Ltd, an unquoted trading company, to his other brother John for 35,000. At that date the shares were worth 65,000. He had acquired the shares in August 2005 for 10,400. Tony has worked for Penny Ltd for three years. On 21 February 2020 Tony sold a vintage car for 49,000 which he had bought in June 2000 for 35,000 On 1 April 2020 Tony gifted his wife, Joanne, a necklace which he had also inherited from his aunt. It was worth 10,000 when he inherited it in 1998 and is worth 22,000 when gifted to Joanne. Tony had employment income of 50,000 in 2019/20 Requirement Calculate the after tax cash available to Tony from his disposals in 2019/20 (10 marks) 4.2 Noah is UK resident and UK domiciled. Noah was the sole beneficiary of his wife Emma's will when Emma died in August 2014. No lifetime gifts have been made by either Emma or Noah. Noah is in poor health, he is not expected to live for more than four years. Noah owns the following assets with current market values as stated: His home in London worth 450,000 A vintage car valued at 37,000. Personal chattels and cash balances of 224,000 - Gateway House, a commercial property, worth 700,000. Noah is considering giving Gateway House to his nephew Gerry in November 2020 to reduce the inheritance tax payable on his death. 4,000 shares in Chalk ple, an investment company, quoted at 208-214p, with marked bargains of 2017, 209p and 219p. The value of all assets is expected to remain the same for the next four years with the exception of Gateway House and Noah's home in London. These are both expected to stay at the same value for the rest of 2019 and 2020, but will increase in value by 10% by March 2024 On his death, Noah will leave his estate to his nephew Daniel Requirement Assume Noah dies in March 2024. Noah is considering two options: Option 1: Noah makes the lifetime gift of Gateway House to Daniel in November 2020 or alternatively; Option 2: Does not make the lifetime gift and still owns Gateway House at his death in March 2024, Calculate the inheritance tax payable as a result of his death under each option. Show your death estate calculations in two columns 'lifetime gift' and 'no lifetime gift'. (14 marks) Total [24 marks] Question 4 e 4.1 Tony is UK resident and UK domiciled for tax purposes. He made the following disposals in 2019/20:- On 20 September 2019 Tony sold a painting to his brother, Peter, for 25,000 despite it being worth 30,000. He had inherited the painting from his aunt in January 1998 when it was worth 50,000.- On 31 December 2019 Tony sold some shares in an unquoted investment company for 60,000 realising a gain of 20,000.- On 5 February 2020 Tony sold a 14% shareholding in Penny Ltd, an unquoted trading company, to his other brother John for 35,000. At that date the shares were worth 65,000. He had acquired the shares in August 2005 for 10,400. Tony has worked for Penny Ltd for three years. On 21 February 2020 Tony sold a vintage car for 49,000 which he had bought in June 2000 for 35,000. On 1 April 2020 Tony gifted his wife, Joanne, a necklace which he had also inherited from his aunt. It was worth 10,000 when he inherited it in 1998 and is worth 22,000 when gifted to Joanne. Tony had employment income of 50,000 in 2019/20.- Requirement Calculate the after tax cash available to Tony from his disposals in 2019/20. (10 marks) 4.2 Noah is UK resident and UK domiciled. Noah was the sole beneficiary of his wife Emma's will when Emma died in August 2014. No lifetime gifts have been made by either Emma or Noah. e Noah is in poor health, he is not expected to live for more than four years. Noah owns the following assets with current market values as stated:- His home in London worth 450,000.- A vintage car valued at 37,000.- Personal chattels and cash balances of 224,000.- Gateway House, a commercial property, worth 700,000. Noah is considering giving Gateway House to his nephew Gerry in November 2020 to reduce the inheritance tax payable on his death. 4,000 shares in Chalk plc, an investment company, quoted at 208-214p, with marked bargains of 201p, 209p and 219p. The value of all assets is expected to remain the same for the next four years with the exception of Gateway House and Noah's home in London. These are both expected to stay at the same value for the rest of 2019 and 2020, but will increase in value by 10% by March 2024. On his death, Noah will leave his estate to his nephew Daniel. Requirement- Assume Noah dies in March 2024. Noah is considering two options: Option 1: Noah makes the lifetime gift of Gateway House to Daniel in November 2020 or alternatively; Option 2: Does not make the lifetime gift and still owns Gateway House at his death in March 2024, Calculate the inheritance tax payable as a result of his death under each option. Show your death estate calculations in two columns 'lifetime gift' and 'no lifetime gift'. (14 marks) Question 4.14 Actual sale proceeds Less CGT After tax cash available WORKINGS (1) (2) 7 (3) (4) - (5) Capital gains tax payable- Qualifying for ER Not qualifying for ER 1 1 1 t 1 T. Less annual exempt amount Gain CGT: t t T. Question 4.24 -Death Estate March 2024- Gift No gift ttt tt Gateway House- 1. 11. 1. Home e t T. Care -Chattelse Sharese C ttttt T tttttttt Total estate -Less nil rate band t t' T -IHT @ 40% T. T. 1 tt 1 . C IHT on lifetime gift (W) Total IHT payable on death T. WORKING Lifetime gift - tax on death Gateway House Less annual exemptions - - tttttt 1.1.1 Less nil rate bande f x 40% IHT after taper relief Question 4 4.1 Tony is UK resident and UK domiciled for tax purposes. He made the following disposals in 2019/20: On 20 September 2019 Tony sold a painting to his brother, Peter, for 25,000 despite it being worth 30,000. He had inherited the painting from his aunt in January 1998 when it was worth 50,000. On 31 December 2019 Tony sold some shares in an unquoted investment company for 60,000 realising a gain of 20,000 On 5 February 2020 Tony sold a 14% shareholding in Penny Ltd, an unquoted trading company, to his other brother John for 35,000. At that date the shares were worth 65,000. He had acquired the shares in August 2005 for 10,400. Tony has worked for Penny Ltd for three years. On 21 February 2020 Tony sold a vintage car for 49,000 which he had bought in June 2000 for 35,000 On 1 April 2020 Tony gifted his wife, Joanne, a necklace which he had also inherited from his aunt. It was worth 10,000 when he inherited it in 1998 and is worth 22,000 when gifted to Joanne. Tony had employment income of 50,000 in 2019/20 Requirement Calculate the after tax cash available to Tony from his disposals in 2019/20 (10 marks) 4.2 Noah is UK resident and UK domiciled. Noah was the sole beneficiary of his wife Emma's will when Emma died in August 2014. No lifetime gifts have been made by either Emma or Noah. Noah is in poor health, he is not expected to live for more than four years. Noah owns the following assets with current market values as stated: His home in London worth 450,000 A vintage car valued at 37,000. Personal chattels and cash balances of 224,000 - Gateway House, a commercial property, worth 700,000. Noah is considering giving Gateway House to his nephew Gerry in November 2020 to reduce the inheritance tax payable on his death. 4,000 shares in Chalk ple, an investment company, quoted at 208-214p, with marked bargains of 2017, 209p and 219p. The value of all assets is expected to remain the same for the next four years with the exception of Gateway House and Noah's home in London. These are both expected to stay at the same value for the rest of 2019 and 2020, but will increase in value by 10% by March 2024 On his death, Noah will leave his estate to his nephew Daniel Requirement Assume Noah dies in March 2024. Noah is considering two options: Option 1: Noah makes the lifetime gift of Gateway House to Daniel in November 2020 or alternatively; Option 2: Does not make the lifetime gift and still owns Gateway House at his death in March 2024, Calculate the inheritance tax payable as a result of his death under each option. Show your death estate calculations in two columns 'lifetime gift' and 'no lifetime gift'. (14 marks) Total [24 marks]