案例分析题

Your firm has been asked to provide advice to two unrelated clients, Stella and Maris. Stella requires advice on the tax implications of making an increased contribution to her personal pension scheme. Maris requires advice regarding the lump sum payment she has received from her pension scheme and the inheritance tax exemptions available on her proposed lifetime gifts.

(a) Stella:

– Is resident and domiciled in the UK.

– Was born on 1 May 1958.

– Receives a gross salary of £80,000 each year.

– Has income from a portfolio of unfurnished properties, totalling £92,000 in the tax year 2015/16.

– Has no other source of taxable income.

– Wishes to make an increased contribution to her personal pension scheme in the tax year 2015/16.

Personal pension scheme contributions:

– Stella has contributed £40,000 (gross) to her personal pension scheme in each of the four tax years 2011/12, 2012/13, 2013/14 and 2014/15.

– Stella wishes to make an increased contribution of £90,000 (gross) in the tax year 2015/16.

Required:

Calculate Stella’s income after tax and pension contributions for the tax year 2015/16 if she does pay £90,000 (gross) into her personal pension scheme.

(b) Maris:

– Is resident and domiciled in the UK and is widowed.

– Has three married children and five grandchildren under the age of 12.

– Attained the age of 68 on 30 January 2015 and decided to vest her pension benefits on that date.

– Wishes to make regular gifts to her family in order to reduce inheritance tax on her death.

Personal pension fund:

– Maris had a money purchase pension scheme which was valued at £1,550,000 on 30 January 2015.

– Maris took the maximum amount possible as a lump sum on that date.

– Maris does not understand why the amount she received was £447,500.

Assets and income:

– In addition to pension income and savings income totalling around £60,000, Maris receives dividends from shareholdings in quoted companies of around £45,000 each year.

– The shareholdings in quoted companies are currently valued at £980,000.

– Maris wishes to gift some of the shares or the dividend income to her children and grandchildren on their birthdays each year.

– Maris already makes gifts each year to use her annual exemption for inheritance tax purposes.

Required:

(i) Explain how the cash of £447,500 received by Maris as a lump sum from her pension scheme was calculated.

(ii) Advise Maris of TWO relevant exemptions from inheritance tax which she will be able to use when making the birthday gifts, together with any conditions she will need to comply with in order to obtain them.