ACCA Advanced Taxation (ATX) Practice Exam

Does the amount of Business Property Relief (BPR) depend on the type of relevant business property?

1. Yes

2. No

3. Only for unquoted shares

4. Only for incorporated businesses

The correct answer is: Yes

The amount of Business Property Relief (BPR) indeed depends on the type of relevant business property. BPR is a relief that reduces the value of a business or its assets for inheritance tax purposes, and it is primarily designed to encourage investment in businesses by reducing the tax burden on transfer of ownership. There are different types of business property eligible for BPR, including sole trader businesses, partnerships, unquoted shares in trading companies, and agricultural property. The level of relief varies depending on the nature of the business property. For example, unquoted shares in a trading company may qualify for 100% relief, whereas other properties, like certain quoted shares or assets used by a business that does not qualify as a trading business, may receive lower relief or none at all. Thus, the type of business property significantly influences the amount of relief available. Therefore, the correct answer emphasizes that the nature of the property is a determining factor in the calculation of BPR.