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Fine Wine and Inheritance Tax
1st March, 2011
Does investing in fine wine qualify for an Inheritance Tax (IHT) break? That's the question that has been causing some confusion recently and Smailes Goldie Chartered Accountants, in Hull and Barton-upon-Humber, say there have been conflicting reports.
HM Revenue and Customs (HMRC) has insisted it does not qualify, and wines must be valued at the open market value at the time of the relevant taxing event.
Jeremy Allison, Partner at Smailes Goldie, said:
"There is a special "wasting asset" rule but this does not apply to IHT, only for Capital Gains Tax (CGT), and only where the wine concerned has an expected life of less than 50 years.
"Where the wine has a longer lifespan than 50 years, one option may be to gift the wine between spouses, CGT free, after a period of time when its remaining life has dropped below the 50 year limit, prior to its onward sale. Alternatively anyone with a stock of valuable wine may consider selling it off bottle by bottle, which may be CGT free, provided the individual sales or bottles do not sell for more than £6,000."
For more information or advice, please contact Smailes Goldie Chartered Accountants on Hull 01482 326916 or Barton 01652 632927.
