Annual exemption

Parki82Parki82 Registered Posts: 33
edited May 17 in Personal Tax
Jonathan who had not made any other transfers in recent tax years made the following lifetime transfers-
170k payment into trust (chargeable transfer)
20k to his son
30k to his daughter

Calculate inheritance tax payable during his lifetime.

The chargeable transfer allows us to deduct two annual 3 k exemptions I.e this years allowance and last years but the gifts only allow one 3k I.e this years allowance.
Why is this?
If no transfers have been made in recent tax years then why can’t we carry the previous 3k over making the gift 20-3-3=14??

Answers

  • Parki82Parki82 Registered Posts: 33
    Can someone help with this please?
    RyanMIP
  • RyanMIPRyanMIP LincolnshireRegistered Posts: 50
    DATES!
  • Parki82Parki82 Registered Posts: 33
    I don’t understand the answer of dates!!

    The chargeable allowance allows us to bring forward last years allowance so why can’t we do the same for the gifts?
  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,443
    Dates are important because the annual exemption is applied on the earlier transfer in the tax year.
  • Parki82Parki82 Registered Posts: 33
    So are you saying you can only carry one 3k annual exemption over?
    And that gets applied on the first transfer?
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