Hi. I’m hoping that someone can confirm that I’m on the right track here please.
I’m administering an intestacy where the residue is split between the surviving spouse and a child.
Am I correct that I should calculate the residuary shares of the surviving spouse and the non-exempt beneficiary based on re Ratcliffe (i.e. split according to the intestacy rules as varied and then deduct the Inheritance Tax from the non-exempt beneficiary’s share)? And because of that, grossing up isn’t an issue? Any thoughts gratefully received.
Yes. Re Ratcliffe concluded that an equal split between exempt and non-exempt beneficiaries would not require that the pre-tax the gifts should be of unequal value so that post tax the two amounts were equal. Thus, where residue is divided between exempt (spouse) and non-exempt (children) beneficiaries no part of the IHT attributed to the non-exempt beneficiaries can be attributed to the exempt beneficiaries.