How Do You Answer Inheritance Tax Questions in ACCA ATX?

Inheritance tax (IHT) is a significant topic in ACCA ATX, and questions typically ask you to compute the tax on lifetime gifts and on death, and to advise on planning. These are method-driven marks, so a clear, structured computation earns credit even where a figure slips. Note that ATX is based on a specific Finance Act, so always use the examinable rates, bands and exemptions.

Understand the two occasions of charge

• Lifetime transfers — potentially exempt transfers (PETs) and chargeable lifetime transfers (CLTs), with tax consequences that can crystallise on death within seven years.
• The death estate — the value of assets at death, subject to available exemptions and reliefs.

Work through the reliefs and exemptions carefully

Marks are won and lost on exemptions and reliefs: the nil-rate band and its transfer between spouses, the residence nil-rate band, the annual exemption, spouse exemption, business property relief and agricultural property relief, and taper relief on gifts within seven years of death.

Structure the computation

Deal with lifetime gifts in chronological order, track the use of the nil-rate band, then compute the death estate. Label each step and show workings so the marker can follow — and award — your method.

Bring in the advice

Many ATX questions ask for planning advice — the timing of gifts, using exemptions, spouse transfers. Tie every recommendation to the taxpayer's circumstances.

Practising full IHT questions and marking them against the official ACCA scheme with The 50% Club shows you exactly where your computation or reliefs lose marks — the quickest way to make ATX IHT reliable.