Art Collector’s Son Scores Inheritance Tax Victory

17/06/2015


Gifts to your loved ones are a sensible means of minimising Inheritance Tax (IHT) liabilities on your death – but it is vital to seek legal advice and leave a clear paper trail behind you if substantial tax savings are to be achieved.

HM Revenue and Customs had raised IHT demands against the son and heir of an art collector in respect of three valuable paintings. As executor of his mother’s estate, he disputed liability on the basis that she had given the paintings to himself and his brother more than 20 years before her death.

In allowing his appeal and accepting that the paintings were free from IHT, the First-tier Tribunal found that his account of the gifts was entirely credible. With some ceremony, the paintings had been taken off the wall of the family home and handed individually to him, before being re-hung where he wanted them. Although the paintings had stayed in the family home, that was only because he and his brother had had nowhere secure enough to keep them.

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