ExpertEasy2 marksMultiple Choice
ACCA · Question 26 · Inheritance tax
Section B - Case 3: Heritage Restorations
Arthur, the founder of 'Heritage Restorations' (a VAT registered sole trader business restoring classic cars), died on 15 November 2023. His estate included 100% of the unquoted shares in a separate trading company, 'Vintage Parts Ltd', valued at £400,000. He had owned these shares for 5 years. His estate also included a classic car collection valued at £250,000, and his main residence valued at £600,000 (left to his son).
What is the rate of Business Property Relief (BPR) available on the unquoted shares in 'Vintage Parts Ltd'?
Section B - Case 3: Heritage Restorations
Arthur, the founder of 'Heritage Restorations' (a VAT registered sole trader business restoring classic cars), died on 15 November 2023. His estate included 100% of the unquoted shares in a separate trading company, 'Vintage Parts Ltd', valued at £400,000. He had owned these shares for 5 years. His estate also included a classic car collection valued at £250,000, and his main residence valued at £600,000 (left to his son).
What is the rate of Business Property Relief (BPR) available on the unquoted shares in 'Vintage Parts Ltd'?
Answer options:
A.
0%
B.
50%
C.
100%
D.
75%
How to approach this question
Identify the type of asset (unquoted shares in a trading company) and the length of ownership (5 years). Match this to the statutory BPR rates.
Full Answer
C.100%✓ Correct
Unquoted shares in a trading company qualify for 100% Business Property Relief (BPR) for Inheritance Tax purposes, provided they have been owned by the transferor for at least two years prior to the transfer (death). Arthur owned them for 5 years, so 100% relief applies.
Common mistakes
Confusing the 100% rate for unquoted shares with the 50% rate for quoted shares (where control exists) or assets used in a business.
Practice the full ACCA TX — Taxation Practice Exam 3
32 questions · hints · full answers · grading
More questions from this exam
Q01Section A
Marcus is a freelance AI developer. He submitted his electronic self-assessment tax re...MediumQ02Section A
'Green Acres Co-op' is an agricultural cooperative operating as a partnership. For the...EasyQ03Section A
Sylvia owns a large converted barn which is her main residence. During 2023/24, she le...MediumQ04Section A
'NovaTech Ltd', a tech startup, provides the following benefits to its employees:
1. A...MediumQ05Section A
Dr. Aris, a marine biologist, is provided with a petrol company car by his employer. T...Hard