IHTM30313 - Attribution process: death estate
Death in February 2002. The deceased is the transferor in the lifetime transfer example (IHTM30312).
The death estate is wholly chargeable and consists of a business dealing in property (£300,000), a house (£150,000) and quoted investments (£140,000), a total of £590,000.
The deceased also made lifetime gifts totalling £400,000, giving a total chargeable transfer of £990,000.
The Inheritance Tax on £990,000 is £299,200, of which £63,200 is due on the lifetime gifts.
The tax on the death estate is £236,000.
- Proportion of tax on business (£300,000)
(300,000 ÷ 590,000) x £236,000 = £120,000
This £120,000 is payable by instalments and as it is a business, although it does not qualify for Business Relief (IHTM25131) because of IHTA84/S105 (3), the instalments are interest free (IHTM30363).
- Proportion of tax on value of house (£150,000)
(150,000 ÷ 590,000) x £236,000 = £60,000
This £60,000 is also payable by instalments. The instalments are not interest free as the house is neither agricultural property (IHTM24030) nor part of a business (IHTM25051).
- Proportion of tax on value of quoted investments (£140,000)
(140,000 ÷ 590,000) x £236,000 = £56,000
This is payable in one sum.