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
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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

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