Question 1

Section B: Case 2 - Eleanor Vance

Scenario: Eleanor Vance, a wealthy agricultural landowner, made several lifetime transfers before her death on 12 November 2023. On 15 August 2021, she transferred £450,000 of cash into a discretionary trust. Eleanor paid the lifetime Inheritance Tax (IHT) arising on this transfer. She had made no previous lifetime gifts.

Question: Eleanor's estate at death was valued at £1.8 million. She left her entire estate to her children. In 2020, she had sold a large main residence (valued at £600,000) and moved into the smaller farmhouse (valued at £250,000).

Assuming all conditions are met, what is the maximum Residence Nil Rate Band (RNRB) available to her estate for 2023/24?

Accepted Answer

Identify the standard RNRB limit for 23/24 (£175,000). Check if the estate exceeds the £2m taper threshold. Check if the property value covers the RNRB.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Assuming the downsizing addition allows the RNRB to exceed the £175,000 statutory limit.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 1

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