Aurora – practice exam ACCA

Hello,

I am really struggling to understand some of the answers provided for Aurora (10 mark question) from the ACCA exam practice portal for Tax -UK.

(a) Inheritance tax (IHT) payable on Aurora’s estate
Let property (350,000 x 3) 1,050,000
Mortgages (115,000 x 2) (230,000)
Main residence 500,000
Chargeable estate 1,320,000
IHT liability (1,320,000 –150,000 –150,000) at 40%408,000

I don’t understand the deduction of 150,000 x 2 from the IHT liability at the bottom, any guidance most welcome.

Additionally, I’m struggling with the next part to Aurora.

In calculating the PRR they provide this as part of the answer:

100,000 x (2 + 1.5)/15
150,000 x (12 + 1.5)/20

I can’t determine where the 1.5 comes from that they use to make this calculation.

Would really appreciate some guidance on this, hope it makes sense.

Adam