If you’re the owner of valuable art, jewellery, or collectibles and you’d like to pass these on to loved ones after your death, it’s not just a matter of making a will, it’s also crucial to make the proper inheritance tax (IHT) arrangements. Here’s some information on why and how to include your valuables in your IHT planning.
Why is IHT planning so important?
Every individual is allowed to pass on the first £325,000 of their estate free from inheritance tax on death and potentially a further £175,000 if conditions are met to qualify for the main residence nil rate band (RNRB). The remaining balance can be taxed at 40%, leaving less than expected to your beneficiaries.
Therefore, it is vitally important to know what the family balance sheet looks like, and also important to consider who should get the assets when you are no longer here so that they are not sold to cover a large IHT bill.
How can you begin IHT planning?
The earlier your IHT planning begins, the more options there are available.
These days, it is comparatively easy to instantly find out the value of the main family assets, as cash, investments, and pension values can be accessed at the touch of a button. It is almost as easy to obtain residential property values, as these can be estimated online. These are the main assets that people consider when looking at their overall estate for inheritance tax (IHT) purposes.
However, just as important as the property itself are the treasured items within your home, which are also included in the IHT calculation and can be more difficult to value.
How can you seek valuations for personal belongings?
If you’d like to seek a valuation for rare items such as paintings and fine art, jewellery, or rare books and manuscripts, an auction house such as Lyon & Turnbull can help.
We spoke recently with James McNaught from Lyon & Turnbull, who explained their valuation process to help clients sell their assets in a competitive market and also gave us an insight into how they have managed to pivot their traditional auction business online. Watch the webinar here to find out more about their service.
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