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You work as a tax senior in an ICAEW firm, and two clients, Raphael and Degas require advice. Raphael requires advice on the tax reliefs
You work as a tax senior in an ICAEW firm, and two clients, Raphael and Degas require advice.
Raphael requires advice on the tax reliefs available for a possible investment in shares in Urbino Ltd and redundancy payments.
Raphael's cousin, Degas, has inherited the whole of his father Constable's estate, and is seeking advice on how much he can expect to receive after inheritance tax has been deducted. He also wants to know how the tax could be reduced by leaving part of the estate to charity.
The following information has been obtained from telephone conversations with Raphael and Degas.
Urbino Ltd
Unquoted company that manufactures art materials.
Close company with employees.
Currently has an issued share capital of ordinary shares.
Plans to make an issue of new ordinary shares at per share on October to raise
Raphael
Raphael is to subscribe for of the new shares in Urbino Ltd
He presently has no connection with Urbino Ltd
On August Raphael received a statutory redundancy payment of and a noncontractual payment of as compensation for loss of office. He also received a terminal bonus of and was sent on a retraining course to help him secure a new job. The cost of this course was and his previous employer paid for it He worked his full notice period so did not receive any payment in lieu of notice.
Constable personal information
Never married.
Was UK resident and domiciled.
Died on April leaving to a charity and the rest of his estate to his son Degas.
Constable lifetime gift
On August Constable transferred quoted shares worth to a discretionary trust for the benefit of his grandchildren.
Constable death estate
Probate values of assets held at death:
table
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