ExpertEasy2 marksMultiple Choice
ACCA · Question 25 · Inheritance tax
Section B - Case 2: Bramble Farms
Arthur owns Bramble Farms, a working agricultural estate. He decides to gift the entire estate to his daughter, Beatrice, during his lifetime. The estate includes agricultural land, a farmhouse occupied by Arthur, and various farm machinery.
If IHT becomes payable on the agricultural land due to Arthur's death within 7 years of the gift, Beatrice can elect to pay the IHT in annual installments. Over how many years can these installments be spread?
Section B - Case 2: Bramble Farms
Arthur owns Bramble Farms, a working agricultural estate. He decides to gift the entire estate to his daughter, Beatrice, during his lifetime. The estate includes agricultural land, a farmhouse occupied by Arthur, and various farm machinery.
If IHT becomes payable on the agricultural land due to Arthur's death within 7 years of the gift, Beatrice can elect to pay the IHT in annual installments. Over how many years can these installments be spread?
Answer options:
A.
5 years
B.
7 years
C.
10 years
D.
20 years
How to approach this question
Recall the IHT installment payment rules for qualifying assets (land, buildings, businesses, unquoted shares).
Full Answer
C.10 years✓ Correct
To prevent the forced sale of illiquid assets like land, businesses, and unquoted shares, HMRC allows the IHT attributable to these assets to be paid in 10 equal annual installments. The first installment is due on the normal due date (6 months after the end of the month of death).
Common mistakes
Confusing the 10-year installment period with the 7-year PET accumulation period.
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