SQE1 sample questions

Question 21

A leasehold flat was owned by a brother and sister as tenants in common in equal shares. The sister died last month and under the terms of her will, the whole of her estate is given to her adult daughter absolutely. It is estimated that the flat is worth £200,000 as a very similar flat in the same block sold for that figure last month. The sister’s estate will be subject to Inheritance Tax (IHT).

If the estimated worth of the flat is correct what will be the value of the sister’s half share for IHT purposes?

A. £100,000 less a percentage discount to reflect the fact that the flat was co-owned at the sister’s death.

B. £100,000 as no discount is available because of the application of the related property rules between brother and sister.

C. £100,000 as no discount is available because of the application of the related property rules between a mother and daughter.

D. £100,000 as no discount is available because of the application of the related property rules which apply when more than two close relatives are connected with the ownership of a property.

E. £100,000 as no discount is available because the flat is leasehold.


A - £100,000 less a percentage discount to reflect the fact that the flat was co-owned at the sister’s death.


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