Tax on records as part of an estate (on death)?

[Rictic66]

Does anyone know if records (chattels) are treated as wasting assets (like a classic car) or non wasting assets (like jewellery or paintings) in a persons estate. 

With values continuing to rise if they a non wasting asset then the beneficiaries could find they have a 40% tax charge on their inheritance. 

Appreciate any views and especially if anyone has had actual experience. 

Thanks PT

[Zoomsoulblue]

A whole collection was sold in one lot within the last 6 months 220k to a dealer 

The seller walked away with £200k - never heard of any tax being paid - all good

[Benji]

to hand down/to inherit a record collection or to sell one are two completely different pairs of shoes tax-wise aren't they?

[Rictic66]

Hi Benjy. Yes they are. There could possibly be some CGT on a sale if declared but inheritance is whether the value appears in the estate calculations or not. If it does and the estate exceeds the IHT personal allowances then there could be large IHT to pay. 

Ill ask an accountant if no one here has knowledge. 

[Rick Cooper]

On 02/08/2022 at 21:41, Rictic66 said:

Does anyone know if records (chattels) are treated as wasting assets (like a classic car) or non wasting assets (like jewellery or paintings) in a persons estate. 

With values continuing to rise if they a non wasting asset then the beneficiaries could find they have a 40% tax charge on their inheritance. 

Appreciate any views and especially if anyone has had actual experience. 

Thanks PT

Interesting question that I should think some people will have had, or will have to deal with. The one thing you can be sure is that HMRC will be well aware of the value of record collections just as much as paintings, jewelry, coins or any other collectables.

My experience of dealing with an estate is that every asset had to be valued and any gifts made up to seven years had to be declared. This was quite a long winded process and most of it was done by an accountant. The total of all the assets plus gifts (using a sliding scale for gifts) was then subject to IHT if above the threshold. A record collection of, say £100000 plus a decent size house ( or a miniscule flat in London) along with other assets/savings could easily be subject to IHT. Not declaring a valuable  record collection could end up with prosecution if HMRC found out. The whole thing's a minefield so it's best left to an accountant. If you find out how record collections are treated by HMRC maybe you could let us know.

[Zoomsoulblue]

Not if you replaced originals with pressing - now look who’s laughing

[Benji]

2 hours ago, Rick Cooper said:

Interesting question that I should think some people will have had, or will have to deal with. The one thing you can be sure is that HMRC will be well aware of the value of record collections just as much as paintings, jewelry, coins or any other collectables.

My experience of dealing with an estate is that every asset had to be valued and any gifts made up to seven years had to be declared. This was quite a long winded process and most of it was done by an accountant. The total of all the assets plus gifts (using a sliding scale for gifts) was then subject to IHT if above the threshold. A record collection of, say £100000 plus a decent size house ( or a miniscule flat in London) along with other assets/savings could easily be subject to IHT. Not declaring a valuable  record collection could end up with prosecution if HMRC found out. The whole thing's a minefield so it's best left to an accountant. If you find out how record collections are treated by HMRC maybe you could let us know.

I'm not familiar with UK tax law. But basically it's the same as german tax law. A record collection is an asset. Period. And if the value of an asset or the total sum of all assets exceed a certain threshold inheritance tax applies.

[Rictic66]

Thanks guys for all your comments. Particularly like the “replace with pressing” comment.

[Bbrich]

On 04/08/2022 at 22:00, Zoomsoulblue said:

Not if you replaced originals with pressing - now look who’s laughing

But you would then have the cash to the value of the originals sold (or some other assets) so still part of your IHT calculation..... (& easier for HMRC to spot cash/bank balances etc...)

Edited August 17, 2022 by Bbrich

[Bbrich]

On 04/08/2022 at 20:14, Rick Cooper said:

Interesting question that I should think some people will have had, or will have to deal with. The one thing you can be sure is that HMRC will be well aware of the value of record collections just as much as paintings, jewelry, coins or any other collectables.

My experience of dealing with an estate is that every asset had to be valued and any gifts made up to seven years had to be declared. This was quite a long winded process and most of it was done by an accountant. The total of all the assets plus gifts (using a sliding scale for gifts) was then subject to IHT if above the threshold. A record collection of, say £100000 plus a decent size house ( or a miniscule flat in London) along with other assets/savings could easily be subject to IHT. Not declaring a valuable  record collection could end up with prosecution if HMRC found out. The whole thing's a minefield so it's best left to an accountant. If you find out how record collections are treated by HMRC maybe you could let us know.

Pretty much explains it for IHT (wasting assets/chattels etc.. is to do with CGT i.e. tax on disposals whilst alive, as opposed to IHT, tax on estate on death). worth noting that (in simple terms) for say a married couple with a house they can have £1m of assets before IHT kicks in.

Edited August 17, 2022 by Bbrich
typo

[Rare Toones]

2 hours ago, Bbrich said:

But you would then have the cash to the value of the originals sold (or some other assets) so still part of your IHT calculation..... (& easier for HMRC to spot cash/bank balances etc...)

Bitcoin.

[Steve M]

On 17/08/2022 at 16:53, Bbrich said:

Pretty much explains it for IHT (wasting assets/chattels etc.. is to do with CGT i.e. tax on disposals whilst alive, as opposed to IHT, tax on estate on death). worth noting that (in simple terms) for say a married couple with a house they can have £1m of assets before IHT kicks in.

The residence nil rate band - transferable between married couples or civil partnerships - is only available if the main residence is left to a direct descendant. A specific claim has to be made. 
 

Where one partner dies leaving everything to the other, there is generally no tax issue of any kind until the death of the latter.