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

Company cars

Company carsIntroductionCompany cars are one of the most common taxable benefits. The rules for calculating the benefit are complex, and the reporting requirements are more onerous than most benefits. Company cars are covered by very specific legislation. Detailed guidance on each of the following

14 Jul 2020 11:15 | Produced by Tolley Read more Read more

Payment of the remittance basis charge

Payment of the remittance basis chargeRemittance basis chargeThe remittance basis charge is an annual charge payable by ‘long-term’ UK residents for the privilege of claiming the remittance basis.Taxpayers who wish to utilise the remittance basis (but do not qualify for it automatically) must pay

14 Jul 2020 12:52 | Produced by Tolley Read more Read more

Interest and penalties on late paid tax under self assessment

Interest and penalties on late paid tax under self assessmentInterestIf the capital gains tax, the balancing payment or payments on account of tax and / or Class 4 national insurance contributions (NIC) are paid late, HMRC will charge interest on the amount overdue from the original due date. The

14 Jul 2020 12:00 | Produced by Tolley Read more Read more