SQE1 sample questions

Question 70

An elderly woman goes to live with her daughter because she is becoming physically infirm and is no longer able to live independently. When she moves in with her daughter, the woman decides to give the majority of her estate to her daughter. She closes most of her bank and building society accounts and transfers the closing balances (approximately £900,000) to her daughter. The woman does not make any other gifts.

Two years later the woman dies and her estate comprises:

• a joint bank account with her daughter which has a balance of £30,000
• a savings account in the woman’s sole name which has a balance of £75,000

The woman has no overseas assets and she does not have an interest under a trust.

The woman leaves a will by which she appoints executors, and gives her estate to her favourite charity.

The executors are preparing the application for a grant of probate and wish to know whether they are required to submit a form IHT400.

Which of the following best explains whether the executors are required to submit a form IHT400?

A. They are not, because the woman’s estate is worth less than £3,000,000.

B. They are, because Inheritance Tax is payable on the woman’s death.

C. They are not, because the woman’s residuary estate is given to a charity.

D. They are, because the woman had an interest in a joint bank account.

E. They are not, because the woman did not make any lifetime chargeable transfers.