Subject : Tax accounting

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2.1 Basic inheritance tax planning may reduce or eliminate inheritance tax payable.

Required:

Outline the four main basic inheritance tax planning tools that may be used to eliminate or reduce inheritance tax payable.

0.4 Marks

Richard died on 4 June 2019, leaving an estate comprising:

• 11,000 ABC plc shares, valued at 25,500

• Main residence worth 360,000

• Investment property valued at 94,000

• 1,000 PPP Investment Ltd shares valued at 78,000 Richard had an outstanding unsecured loan of 5,860 to his bank at the time of his death.

  Richard left a will directing that his wife should take the Abdulla plc shares, the main residence should go to his daughter and the rest of his estate should go to his son.

He had made one gross chargeable transfer during his lifetime in 2013 of 241,000.

Required

Show the IHT payable on Rory's estate.