ExpertEasy2 marksMultiple Choice
ACCA · Question 07 · Inheritance tax
Section A
David inherited £200,000 from his sister, Sarah, who died 3 years ago. Sarah's estate paid IHT at 40% on this legacy. David has now died. His estate is subject to IHT. What percentage of the IHT paid by Sarah's estate on the £200,000 can David's estate claim as Quick Succession Relief (QSR)?
Section A
David inherited £200,000 from his sister, Sarah, who died 3 years ago. Sarah's estate paid IHT at 40% on this legacy. David has now died. His estate is subject to IHT. What percentage of the IHT paid by Sarah's estate on the £200,000 can David's estate claim as Quick Succession Relief (QSR)?
Answer options:
A.
100%
B.
80%
C.
60%
D.
40%
How to approach this question
Recall the QSR percentage scale based on the years between deaths: 0-1 yr (100%), 1-2 yrs (80%), 2-3 yrs (60%), 3-4 yrs (40%), 4-5 yrs (20%).
Full Answer
C.60%✓ Correct
Quick Succession Relief (QSR) reduces the IHT payable on an estate if the deceased inherited property within the last five years that was already subject to IHT. The relief percentage depends on the time between the deaths: 0-1 year (100%), 1-2 years (80%), 2-3 years (60%), 3-4 years (40%), 4-5 years (20%). Since David died 3 years after Sarah, the applicable rate is 60%.
Common mistakes
Selecting 40% by confusing the 3-4 year bracket with the 2-3 year bracket.
Practice the full ACCA TX — Taxation Practice Exam 4
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