Grossing up calculations

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance

Grossing up calculations

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
imgtext

This guidance note should be read in conjunction with the illustrative Grossing up calculations examples.

The partial exemption problem

Gifts in a Will may be broadly divided into:

  1. specific gifts, which are gifts of a particular item or an amount of money, and

  2. residuary gifts, which are comprised of what is left after payment of all debts, expenses, specific gifts and taxes

Specific gifts may be chargeable or exempt. The tax on chargeable specific gifts is paid out of residue unless:

  1. the property which forms the basis of the gift is not in the UK, or

  2. there is a contrary direction in the Will

Residuary gifts may also be chargeable or exempt. An exempt residuary gift does not bear any of the tax attributable to residue but it does bear part or all of the tax attributable to chargeable specific gifts.

See the Incidence of tax on specific gifts and Incidence of tax on residuary gifts guidance notes.

In order to calculate residue one needs

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+

Popular Articles

Reverse charge ― buying in services from outside the UK

Reverse charge ― buying in services from outside the UKThis guidance note covers the reverse charge that applies to services that have been bought in from outside the UK. For an overview of VAT and international services more broadly, see the International services ― overview guidance note. For

15 Dec 2020 14:02 | Produced by Tolley Read more Read more

Tax on UK resident beneficiaries of non-resident trusts ― overview

Tax on UK resident beneficiaries of non-resident trusts ― overviewIntroductionUK resident beneficiaries of non-resident trusts are subject to UK tax on payments or benefits received from the trust. They are liable for income tax on income distributions from the trust and they may also be liable to

14 Jul 2020 13:47 | Produced by Tolley Read more Read more

Gilts

Gilts‘Gilts’ are securities that are also known by a number of different names (eg gilt-edged securities, Government securities or treasury stock).The Government sells gilts to fund the deficit between public spending and tax receipts. Normally, the Government pays interest to the holder of the gilt

14 Jul 2020 11:48 | Produced by Tolley Read more Read more