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Thanks. So to be clear. If my friend has made gifts of say 300k 4 years ago and now dies with an estate of 925k, the position is as follows-
Total gifts in last 7 years 300
Remaining estate 925
total estate 1225
less IHT allowance 325
subject to IHT 900
IHT at 40% 360
Therefore no taper relief applies to the gifts as they are used first to absorb the IHT allowance? Is this correct?
As his wife died earlier this year and left her assets to him, he has her 325k as well which reduces his taxable est to 575 and tax of 230k so no benefit from taper relief at all!!!!
Obviously needs some advice!!
Thanks but your example is wrong! The gift was 300k not 325k as shown in your example?
Also 240k plus 8k is 248k not the 608k at the end of your example!!!!!!!!!!!!!!!!!
The typo at the end is not the problem.
The error re the value of the gift is though, as surely this changes everything.
As the gift of 300k is less than the allowance of 325k then there is no tax payable on the gift and my original problem that no taper relief is given as the gifts are offset against the allowance first remains!! It would therefore appear that unless someone gives lifetime gifts of more than their 325 allowance then no taper relief applies. Is this correct?