HC Deb 07 June 1988 vol 134 cc531-2W
Mr. Gordon Brown

To ask the Chancellor of the Exchequer what would be the total amount of inheritance tax payable in respect of an inheritance of £1 million of a capital distribution made to an individual from an accumulation and maintenance trust where the settlor has survived for seven years.

Mr. Norman Lamont

[holding answer 23 May 1988]: Gifts are exempt from inheritance tax where donors

Name of public body or department (1,2,3) Category of public body (4) Statutory requirement Form and place of publication (5)
Agricultural Training Board, The NDPB Agricultural Training Board Act 1982 Annual accounts available from Body
Arts Council of Great Britain NDPB Royal Charter 1967 Annual accounts available from Body
Audit Commission for Local Authorities in England and Wales NDPB Local Government Finance Act 1982 Annual accounts available from Body

survive seven years. This applies also to distributions from accumulation and maintenance trusts where the settlor has survived seven years.

Mr. Gordon Brown

To ask the Chancellor of the Exchequer how much inheritance tax would be payable in respect of an inheritance in 1988–89 amounting to £1 million by a single individual on his or her 21st birthday comprising(a) a gift of shares from his father in an unquoted company comprising a controlling interest and constituting business property valued at, before relief £200,000, (b) cash from his mother who has made no previous gifts of £100,000, (c) a gift of a farm from his uncle who survives for seven years after the gift of the value of £500,000 and (d) capital distribution of £200,000 from an accumulation and maintenance trust set up by his father who survives for seven years, where no gifts have been made by his father other than (a) and (d).

Mr. Norman Lamont

[holding answer 23 May 1988]: Because the donors at (a) (c) and (d) have survived their gifts by seven years and the gift by the donor at (b) is below the 1988–89 taxable threshold, (an exemption which also applied under capital transfer tax) no inheritance tax would be payable in 1988–89 on any of these gifts. However, if the donors at (a), (c) and (d) had died within seven years of their gifts, inheritance tax would have been payable at their deaths with business and agricultural property reliefs on the gifts at (a) and (c) as under capital transfer tax.