ExpertThis question is part of a case study — click to read the full scenario(Case 21)
SCENARIO: Arthur, aged 65, has run GreenMeadows Farm as a sole trader for 30 years. On 1 May 2023, he sold a barn used for storage for £150,000, realizing a gain of £80,000. He immediately reinvested £100,000 into a new combine harvester. On 1 June 2023, he gifted 10,000 unquoted shares in a farming supply company to his daughter, generating a chargeable gain of £40,000. Arthur sadly passed away on 1 December 2023. His estate included the farmhouse, which he occupied for agricultural purposes.
QUESTION: Does the sale of the barn qualify for Business Asset Disposal Relief (BADR)?
ACCA · Question 23 · Inheritance tax
SCENARIO: Arthur, aged 65, has run GreenMeadows Farm as a sole trader for 30 years. On 1 May 2023, he sold a barn used for storage for £150,000, realizing a gain of £80,000. He immediately reinvested £100,000 into a new combine harvester. On 1 June 2023, he gifted 10,000 unquoted shares in a farming supply company to his daughter, generating a chargeable gain of £40,000. Arthur sadly passed away on 1 December 2023. His estate included the farmhouse, which he occupied for agricultural purposes.
QUESTION: To qualify for Agricultural Property Relief (APR) at 100%, how long must Arthur have occupied the farmhouse for agricultural purposes before his death?
SCENARIO: Arthur, aged 65, has run GreenMeadows Farm as a sole trader for 30 years. On 1 May 2023, he sold a barn used for storage for £150,000, realizing a gain of £80,000. He immediately reinvested £100,000 into a new combine harvester. On 1 June 2023, he gifted 10,000 unquoted shares in a farming supply company to his daughter, generating a chargeable gain of £40,000. Arthur sadly passed away on 1 December 2023. His estate included the farmhouse, which he occupied for agricultural purposes.
QUESTION: To qualify for Agricultural Property Relief (APR) at 100%, how long must Arthur have occupied the farmhouse for agricultural purposes before his death?
Answer options:
1 year
2 years
5 years
7 years
How to approach this question
Full Answer
Common mistakes
Practice the full ACCA TX — Taxation Practice Exam 6
32 questions · hints · full answers · grading