Press Releases
March 2011
Inheritance Tax and fine wine
Chartered accountancy firm, Rickard Keen, are reporting that there have recently been conflicting reports on whether investing in fine wine qualifies for an Inheritance Tax (IHT) break. HM Revenue and Customs (HMRC) has insisted it does not, but others have argued that the ‘wasting asset’ rule applies.
Keith Bell from Rickard Keen said: “That rule would mean that, for tax purposes, the wine was accounted for at the price paid for it, rather than its value at the time, which would be useful if it had risen in value.
“However, the wasting asset does not apply to IHT, only for Capital Gains Tax (CGT), and can be applied where the wine concerned has an expected life of less than 50 years.
“Where the wine has a longer lifespan, one option would be to gift the wine between spouses, CGT free, after a period of time, by which point its remaining life may have dropped below the 50 year limit. Alternatively, anyone with a large stock of wine could sell it off bottle by bottle, which is CGT free provided the individual bottles do not sell for more than £6,000”.
For more information, please contact Rickard Keen’s Southend-on-Sea office on 01702 347771 or the Basildon office on 01268 548127 or visit www.rickardkeen.co.uk