ACCA Advanced Taxation (ATX) Practice Exam

In the context of tax, what does SBA relief primarily address?

1. The selling of a primary residence

2. Exemptions for business asset disposals

3. Income tax for individuals

4. Group taxation methodologies

The correct answer is: Exemptions for business asset disposals

SBA relief, which stands for the Small Business Asset relief, primarily addresses exemptions related to the disposal of business assets. This relief is particularly significant for small business owners as it allows them to mitigate the tax impact of selling or transferring business-related assets. When a business owner disposes of assets that qualify for this relief, they may be eligible to claim various exemptions from capital gains tax. This is designed to encourage investment and reinvestment in small businesses by reducing the associated tax liabilities upon disposal. Such relief is crucial for maintaining cash flow and supporting business growth. The focus on business asset disposals distinguishes SBA relief from other tax mechanisms that deal specifically with personal income or non-business-related transactions, such as the selling of a primary residence or individual income tax scenarios. Additionally, the concept of group taxation pertains to corporate structures and does not directly relate to the individual relief measures designed for small business asset transactions.