(1).
Statement A is false
Cars are exempt assets for the purposes of CGT, so there are no CGT implications on the gift of a car.
Cars are not exempt assets for the purposes of IHT. Accordingly, the gift of a car from one individual to another is a potentially exempt transfer.
Statement B is true
There are potential IHT implications because a sale at an undervalue produces a fall in value of the vendor’s estate which may result in a chargeable transfer.
There are CGT implications because the sale by an individual of a building is a disposal by a chargeable person of a chargeable asset, such that a chargeable gain or allowable loss will need to be calculated (using deemed proceeds of £630,000).
(2). IHT and CGT implications of being neither domiciled nor deemed domiciled in the UK.
IHT
Assets situated overseas are not subject to IHT.
CGT
Gains on assets situated overseas may be taxed on the remittance basis rather than the arising basis. This may require a payment of the remittance basis charge.
(3). Gift to another individual of 3,000 ordinary shares in Fairlane Ltd.
Business property relief (IHT)
Gerald must have owned the shares for at least two years or replaced other business property which, together with the shares, he has owned for at least two out of the previous five years.
At the time of the gift there must not be a binding contract for a future sale of the shares by the donee.
The donee must still own the shares when Gerald dies (or must have pre-deceased Gerald whilst still owning the shares).
The shares must still qualify for BPR when Gerald dies, or when the donee dies if earlier.
Gift holdover relief (CGT)
The donee must be resident in the UK.
The donee must agree to sign the election together with Gerald.