IHTM30312 - Attribution process: lifetime transfers
In May 2000 Terri settles the following property on relevant property trust (IHTM42161), the transferee (IHTM30244) paying the tax
- 拢160,000 cash
and
- 20,000 shares in XYZ Ltd, an unquoted company (the value is 拢240,000).
The value transferred by the transfer, which is wholly chargeable, is 拢400,000.听 The part of this value attributable to
- the shares is (120,000 梅 200,000) or 3/5
- the cash is (80,000 梅 200,000) or 2/5.
The part attributable to the shares qualifies for instalments because
- the transferee is paying the tax
- the part of the value transferred attributable to the shares exceeds 拢20,000, and
- the shares represent more than 10% of the company鈥檚 share capital (IHTM30256).
The calculation of the tax immediately payable (there being no previous cumulative total) is:
听
Value听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听 Lifetime tax
拢400,000 transfer听听听听听听听听听听听听听听听听听听听听听听听听听听听 拢33,200听听听听听听听听听听听听 which splits thus:
2/5 attributable to cash听听听听听听听听听听听听听听听听听听拢13,280听听听听听听听听听听听听听 payable in one sum
3/5 attributable to shares听听听听听听听听听听听听听 拢19,920听听听听听听听听听听听听听 payable by instalments.听
听
The transferor dies in February 2002.听 The additional tax on the lifetime transfer is:
Tax at February 2002 full rate听听听听听听听听听听听听听听听听听听 拢63,200
Less tax as above听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听 拢33,200
Additional tax听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听拢30,000
听
As the shares are still held by the transferee and remain unquoted at the death, instalments are available for 拢18,000 - i.e. the 3/5 part of the 拢30,000 attributable to the shares.
听