Wine investors must beware IHT misunderstanding
Wine investors missold how inheritance tax rules work on their purchases
Wine investors may be driven to drink over the latest warning from
HM Revenue &
Customs about its tax treatment.
The taxman has noted that there has been confusion about how wine is treated
for inheritance tax (IHT) purposes.
Under IHT rules the value of wine is calculated at current market value
rather than the price at which it was bought.
Advisers from UHY Hacker
Young warned that they have seen wine investment sales literature
which incorrectly suggests its IHT value is calculated at cost.
“Tax law is pretty clear on this point but wine investments are sometimes
made in a very salesy and high pressure environment and good salesmen always
sound plausible – some may not even know they are giving incorrect tax advice,
said Mark Giddens, partner at UHY Hacker Young.
“HMRC will be watching closely for this – it is part of a general trend for
HMRC to clampdown on IHT evasion.”
Further reading:
Smith
& Williamson raise inheritance tax red flag on holiday lets