|News - Tax|
|Written by Ray Clancy|
|Wednesday, 13 October 2010 10:25|
UK investors in wine are building up huge unexpected tax bills having been misled by salesmen over how HM Revenue and Customs treat wine, it is claimed.
HMRC recently produced guidance warning of increasingly widespread misunderstanding that the value of wine investments for inheritance tax (IHT) purposes is based on the purchase price of wine rather than its current market value.
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Clearly anyone considering wine investment or who already has wine investments should get professional tax advice and not rely on what some high pressure telesales person tells them. Nor should they rely on claims about wine being a tax-free investment made on some companies' websites.
Although many wines but not all are considered by HM Reveue and Customs to be wasting assets, the concept of wasting assets does not apply for inheritance tax. Inheritance tax values are based on current prices and not the price at which the wine was bought.