uccession and Retirement planning Carol and Kiaan acquired 100% of the share capital in Echotwo Limited, a UK based trading company, in May 2005, with Carol acquiring 60 ordinary shares and Kiaan 40 shares, each at a cost of 5,000 per share. Carol and Kiaan were appointed directors of Echotwo Limited in May 2005. Carol and Kiaan are married and have two adult daughters, Ayesha and Zara. Carol died in November 2019 leaving under the terms of her will 20 shares each to Kiaan, Ayesha and Zara. It was agreed that the probate value of Carol's shares in Echotwo Limited was 8,000 per share. a) Briefly identify and explain any IHT reliefs and exemptions that may have applied to the shares on Carol's death. (4 marks) In May 2021, Zara agreed to buy Ayesha's shares from her for 200,000. This was agreed as the market value by HMRC. Ayesha is a higher rate taxpayer and made no other capital gains during 2021/22. b) Calculate the capital gains tax liability of Ayesha arising on the sale of her shares. (4 marks) c) Describe the conditions that would have needed to have been satisfied for Ayesha to benefit from Business Asset Disposal relief on the sale. (2 marks) d) Briefly explain how Ayesha could use an EIS investment to defer the capital gains tax payable. (2 marks) In January 2022, Kiaan decided to give his 60 shares to Zara. At the time his shareholding was valued at 750,000. Kiaan and Zara agreed to enter into a gift relief election. e) Calculate the held over gain and the capital gains tax base cost of these shares for Zara. (6 marks) f) Explain how IHT Business property relief could be lost if Kiaan dies within 7 years of this gift. (2 marks) Total: 20 marks