ACCA Advanced Taxation (ATX) Practice Exam

For Business Property Relief (BPR), does related property count towards assessing control?

1. Yes, it is considered

2. No, it is not included

3. Only in specific circumstances

4. Only if related persons are involved

The correct answer is: Yes, it is considered

Business Property Relief (BPR) is a significant relief that reduces the value of a business, or a share in a business, for inheritance tax purposes. When determining whether control is established for the purposes of BPR, related property is indeed considered. This includes properties that are associated with the business, ensuring that the assessment of control accurately reflects the individual's influence and the structure of ownership across both the business and its related properties. Including related properties in the calculation of control helps to ensure that individuals who have a significant degree of influence over the business are correctly characterized, allowing them to qualify for BPR more effectively. This is crucial for individuals who might own other assets that contribute to the business's overall value and its operations. Thus, for an accurate evaluation of BPR eligibility and the purposes of assessing control, related property does play a fundamental role in the determination process.