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's estate includes an investment property that does not qualify for any reliefs. The executors wish to pay the IHT attributable to this property in annual installments. Over how many years can these installments be spread, and when is the first installment due?

Accepted Answer

Recall the rules for paying IHT in installments. It applies to land, buildings, and certain shares. The payment is spread over 10 equal annual installments. The first installment is due on the normal due date for IHT on death, which is the end of the sixth month following the month of death.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Thinking the first installment is due a year after death, or that investment properties don't qualify for the installment option.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 5

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