Commentary

I4.548 Absolute interest in residue—examples

IHT, trusts and estates

I4.548 Absolute interest in residue—examples

I4.548 Absolute interest in residue—examples

Example 1

Robert who is liable to tax at the higher rate has an absolute interest in 50% of the estate of his father who died on 1 October 2014. The PRs made a payment of capital to Robert of £1,000 on 1 January 2016 and payments of income as follows:

1 March 2015, £600

1 September 2015, £500

1 March 2016, £500

1 September 2016, £400

1 March 2017, £800.

The residuary income of the estate was as follows:

££££
RentsInterestDividendsTotal
2014/15
Gross1,000200500
Tax at appropriate rate2004050
Net800160450
50% interest40080225705
2015/16
Gross2,0003001,000
Tax at appropriate rate40060100
Net1,600240900
50% interest8001204501,370
2,075
2016/17
GrossNil1,0002,000
Tax at appropriate

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