Question 1

Section B: Case 2 - Arthur Pendelton's Estate

Scenario: Arthur Pendelton died on 15 February 2024. He owned a working farm, 'Oakwood Farm', which he had actively farmed himself for the last 15 years. The farm consists of agricultural land, a farmhouse where Arthur lived, and two farm cottages occupied rent-free by his farm workers.

Question: Arthur also owned 15% of the unquoted ordinary share capital in 'AgriSupplies Ltd', a trading company that supplies farming equipment. He had owned these shares for 4 years. Do these shares qualify for Business Property Relief (BPR), and if so, at what rate?

Accepted Answer

Identify the asset type: unquoted shares in a trading company. Check the ownership period: 4 years (meets the 2-year minimum). Determine the BPR rate: unquoted shares attract 100% BPR, regardless of the size of the shareholding.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Confusing the BPR rules with BADR rules (which require a 5% holding) or assuming 50% BPR applies because he doesn't have control.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 5

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