Avoiding CGT on heirlooms
Helen Mackenzie of Scottish accountancy concern Chiene + Tait discusses some of the best ways to avoid paying CGT on family heirlooms.
In an interview with Taxguide.co.uk she notes that with families currently looking to auction heirlooms such as furniture, paintings and historical papers there are a number of ways to avoid paying Capital Gains Tax.
'The most simple one is to use your spouse's annual exemption (Taxguide.co.uk notes this stands at £10,600 per partner in a couple for the 2011-2012 tax year)' adding that there is also the option to 'make use of losses going forward'.
One interesting excpetion to paying CGT are clocks, which Mackenzie notes are not eligible for CGT. (Clocks are classified by HMRC as 'wasting assets').
A more complicated means of avoiding CGT concerns using what are known as douceur arrangements in which a vendor will receive an increase of around 25 per cent on the purchase price in return for the purchaser taking on the cost of the liability. However Mackenzie notes this agreement is only available for purchases with bodies such as museums or libraries.
She adds that in the current market there are a number of welathy foreign investors looking to purchase 'heritage' artefacts- which relate to their country of origin, with Chinese investors in particular snapping up a number of Chinese antiques in the hands of British families.
Traditionally she remarks it is 'aristocratic families that were able to travel overseas' that tend to hold such antiques.
Further information from Taxguide.co.uk on capital gains tax, taper relief and indexation relief is available here.