Tom Tirith, aged 76, made a cash gift of £200,000 to his daughter on 20 December 2010. He is now going to make a cash gift of £450,000 to a trust on 20 February 2012.

The nil rate band for the tax year 2010–11 is £325,000.

Required:
(i) Calculate the lifetime inheritance tax that will be payable in respect of Tom Tirith’s gift of £450,000 to a trust if:
(1) the trust pays the tax arising from the gift; or
(2) Tom pays the tax arising from the gift.
The total marks will be split equally between each part. (3 marks)

(ii) Assuming that Tom Tirith pays the tax arising from the gift of £450,000, calculate the additional inheritance tax that would be payable in respect of the gift if Tom were to die on 30 June 2016.

Note: You should assume that the nil rate band of £325,000 remains unchanged. (4 marks)