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The Technical Quiz: 7 August

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To help you to keep up with the fundamentals of tax, retirement and financial planning, try answering these questions 

1) John owned the following assets at the date of his death: a retail shop operated as a sole trader; a 40 per cent share in a partnership running a wholesaling business; a 90 per cent shareholding in an unlisted IT consultancy company; and 1 per cent of the shares of a UK-listed publishing company. All these assets have been owned for many years. Which of the assets will qualify for IHT business property relief?

A) All the assets.

B) All the assets except the interest in the partnership.

C) All the assets except the retail shop.

D) All the assets except the shareholding in the listed company. 

2) Is it preferable for inheritance tax purposes to hold business assets within a company, or outside the company and owned by an individual?

A) Outside the company and personally owned.

B) It makes no difference to the owner’s IHT liability.

C) Within the company, as the business property relief is more beneficial.

D) Outside the company and in joint names with a spouse. 

3) Joan and Jacob are married and they each own a 50 per cent share in their family company. How would their shareholdings be valued for IHT purposes?

A) The value for IHT purposes would be based on the value of a 50 per cent shareholding in the company.

B) The value for IHT purposes is based on the shareholdings valued together under the related property rules.

C) The value for IHT purpose is nil, as the shares are in a family company.

D) Their shares are valued as if they each had a majority holding.

Questions supplied by Technical Connection.

 

 

Scroll down for correct answers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Answers

1) D

2) C

3) B

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