Family heirlooms such as art, historic literary works and valuable memorabilia can give the owner much pleasure during their lifetimes, but the next generation a headache when they inherit. Such items will often be expensive, and so will the inheritance tax. There is no automatic exemption from IHT for heirlooms and heritage assets and the recipient may have to pay tax on the item they inherit at the rate of 40%. However, to save family members from having to use valuable savings or sell assets to fund this tax, there are steps the owner can take during their lifetime to make life easier for loved ones on death.
In this article published in Private Life, the client magazine of Arbuthnot Latham (www.arbuthnotlatham.co.uk), reproduced here with kind permission, Ann Stanyer, a partner in the Private Client team at Wedlake Bell, discusses the options available. Ann is an expert in tax planning involving personal chattels and is author of Sweet & Maxwell's Personal Chattels: Law, Practice and Tax. Please contact Ann for further information on this area of tax planning.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.