Inheritance tax and expensive motors?

Discussion in 'General Discussion' started by chriswt, Oct 10, 2007.

  1. chriswt

    chriswt Hardcore MB Enthusiast

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    Does anyone know if assets such as cars and boats etc are still exempt from the ridiculously low (IMO) inheritance tax?

    I know that precious metals and stones like gold and diamonds are taxable, and I for one would be the first to inform the inland revenue of every such item in my possession including the gold plated jack plugs on my hifi.:rolleyes: .. but what possessions are still exempt?

    Of course I would never dream of attempting to do the tax man:devil: out of his hard earned cash but if, for arguments sake someone were to buy a DB5 would it then be liable for tax when that person died?
     
  2. television

    television MB Club Veteran

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    Everything owned that has any value is added towards the inheritance pot.

    The only thing that you can take off is £1500 for the funeral cost
     
  3. imadoofus

    imadoofus Hardcore MB Enthusiast

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    Any chattels that form part of the estate are subject to IHT.
     
  4. crockers

    crockers MB Club Veteran

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    I think all funeral costs and legal cost are deducted (as long as they are reasonable) before assessment. But isnt the new threshold just been increased to £600k - and £750k or thereabouts in 2010?


    Isnt he a "Darling"....
     
  5. OP
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    chriswt

    chriswt Hardcore MB Enthusiast

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    Is that a new ruling because I was told that anything that deprecated such as cars and the like were always exempt?
     
  6. crockers

    crockers MB Club Veteran

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    No -- cars are possessions and as such form part of the estate for IHT purposes.....sorry.
     
  7. gbjeppm

    gbjeppm Hardcore MB Enthusiast

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    The individual threshold is still £300k, the married couples threshold is now £600k, but with some basic tax planning and a correct will, that could be achieved anyway beforehand.

    He has introduced it retrospectively, so for those couples who did not tax plan, where one has already been bereaved it will kick in, allegedly!!!

    Not quite as great as the government would have you believe:mad:
     
  8. OP
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    chriswt

    chriswt Hardcore MB Enthusiast

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    From a 'google' search it appears that cars are only exempt from capital gains tax.

    So how do you arrive at the value of a car for IHT purposes? Cars lose money on a monthly basis so wouldn't you find yourself in the situation where you'll never be able to realise the value of the car that it was tax at?
     
  9. BonzoDog

    BonzoDog Hardcore MB Enthusiast

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    Don't worry, I am sure your friendly tax inspector will think of something that satisfies him.
     
  10. Satch

    Satch Hardcore MB Enthusiast

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    A key area for HMRC questions. See form D10!
     
    Last edited: Jun 4, 2009
  11. gbjeppm

    gbjeppm Hardcore MB Enthusiast

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    It is likely to be the market value of the car at the time of death, I would think.

    It would be set/agreed by the executor, but I suppose could be challenged by the revenue.
     
  12. Baschurchbill

    Baschurchbill Active Member

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    As I understand it everything that is left is valued as of the day of death and taxed accordingly - that includes cars, jewellry etc.
     
  13. OP
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    chriswt

    chriswt Hardcore MB Enthusiast

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    Thats the problem, if your estate takes a couple of years to sort out then any assets subject to deprecation will be unfairly taxed.

    My Father-in-laws mother died in 2003 and her estate still isn't sorted.

    Interestingly enough on the flip side my father-in-laws Dad went for a swim (Reginald Perrin style) in 1991 and was never seen again. Of course the Inland Revenue aren't liking the idea of back dating asset values to 1991 prices and so are kicking up a right fuss.
     
  14. television

    television MB Club Veteran

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    If you try and go the capitol gains way, then you must have owned the goods for 7 years to escape, under that its on a sliding scale.

    I wound up my parents estate in 2001 and went the inheritance way owing to some slight advantages, its easy to do your self and you do not need a solicitor to cream off the top, it just means 2 journeys to london to satisfy the registrar though it can be done locally but this takes longer
     
  15. DrNick

    DrNick Hardcore MB Enthusiast

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    As an aside, if anything of value is mentioned in a will, it has to be professionally valued for IHT assessment (which adds hassle and cost!)

    eg I bequeath my gold wedding ring to X - wedding ring should be valued for IHT purposes.
     
  16. television

    television MB Club Veteran

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    Not required unless the object has an obscene value, then in that case it does not matter if you lose a bit on the valuation

    Unless such thing are itemised for insurance the just lose them
     
  17. Baschurchbill

    Baschurchbill Active Member

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    One thing that struck me as very unfair. My mother died in Fed 2005 and I had to sell their house as my father was now in residential care. Just before the sale went through he to died which meant that the costs of selling now came out of the nett estate and not the gross estate! Increasing tax by several thousand pounds.
     
  18. OP
    OP
    chriswt

    chriswt Hardcore MB Enthusiast

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    But according to Johann Hari of the Independant its only the richest that suffer at the hands of IHT and so its ok because why does anyone with hard working parents deserve a tax free hand out when they could be sitting around doing nothing all day to earn it!......

    http://comment.independent.co.uk/columnists_a_l/johann_hari/article3043766.ece

    .........but of course its ok for certain members of society to claim benifit for sitting around doing nothing all day!

    That article really wound me up this morning whilst sitting on the tube reading it!
     
  19. crockers

    crockers MB Club Veteran

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    Could you elaborate? There are many people on benefits who wish they weren't and are grateful that there is a safety net in society to assist them. Of course there are those who "use the system" - but I would hate to live in a country that penalised genuine people in need of help and assistance just to get at those that abuse the system....I think its called civilsation.
     
  20. WLeg

    WLeg Hardcore MB Enthusiast

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    Buy a cheap car, stick an expensive personal plate on it, leave "my Nissan Micra" to someone.......wonder if they would pick up on it....or do you have to declare it...?
     

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