Tx notes fa22 Final

Compute the transfer of value if A were to die leaving his shares to his daughter, or 
alternatively if he were to make a lifetime gift of 20,000 shares to his daughter. 
If A died owning his 60,000 shares, a 60% shareholding, they would be valued at £25 per share i.e., 
60,000 @ £25 = £1,500,000. This figure would be included in his death estate.
If, however, he was to give 20,000 shares in lifetime, the transfer of value would not be based on the 
value of a 20% interest i.e. £10 per share, but would be computed as the difference between the 
value of his estate before and after the transfer:
Before
60,000 shares (60%) @ £25 =
1,500,000
After
40,000 shares (40%) @ £15 = 
600,000
Transfer of Value
900,000

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Chargeable Property
All property to which the donor is beneficially entitled.
Chargeable person 
An individual who is:
๏
UK domiciled - chargeable on worldwide assets
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Not UK domiciled - chargeable on UK assets only
2. Lifetime Transfers and exemptions 
There are three types of lifetime transfer:
Exempt transfers: 
there is
 
no IHT at any point.
Potentially exempt transfers
(PETs); This is a gift by an individual to another individual
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At the time the PET is made there is no IHT is chargeable
๏
If the donor lives seven years, the gift becomes exempt and no further IHT is charged.
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If the donor dies within the next seven years, then the PET becomes chargeable.