One aspect I felt many tax students neglect is the IHT death estate. You need to put all assets into the death estate including exempt assets for CGT.

Deduct any agricultural property relief on farms (100%) and business property relief (100%) on unquoted shares.

Controlling interests in quoted companies get 50% BPR.

The assets are valued based on the market value at death which is also called probate value.

You then must deduct exempt legacies (spouse, charities, and political parties) and expenses like credit card debts, tax in the year of death, and reasonable funeral expenses

Usually, part of the nil rate band is consumed by lifetime transfers so not 100% is available on the death estate.

If 10% of the baseline amount (add back any RNRB and charitable legacy) is left to a charity, then tax the death estate at 36% instead of 40%.

Once you have computed the tax, deduct quick succession relief if any assets were taxed twice in the last 5 years based on the formula (original tax x original asset/ original death estate x QSR%). Just remember 2 deaths in 1 year is 100% and then reduce by 20% for each successive year.

Finally, if any overseas assets have suffered tax, deduct double tax relief based on the lower of UK tax and overseas tax (given). Here, you need to find the UK estate rate to 3 decimal places (tax after QSR / chargeable estate before NRB) and multiply it by the overseas asset

This tax is payable by the executors or personal representatives 6 months after the month of death. Remember that for instalment property (buildings and businesses that do not get BPR) tax can be paid in 10 annual installments.

If you are planning on doing Taxation or Advanced Tax in September 2022 or December 2022, I recommend you purchase Tax Condensed or Advanced Tax Condensed which will allow you to learn the technical rules If you then practice the key questions I recommend, you too will be ready for anything the examiner throws at you.

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