Given the alarming number claims on the websites of companies offering wine investment that profits on wine are tax-free in the UK, the following extract from the August 2010 newsletter from HM Revenue & Customs should provide a cold shower of reality.
'Wine valuation
It has been brought to HMRC’s attention that information in the public domain indicates that for Inheritance Tax purposes wine cellars are valued at the purchase price rather than the value at the date of death. This is incorrect.
Section 160 IHTA1984 states that for Inheritance Tax purposes the value of any property is the price it might reasonably be expected to fetch if sold in the open market at that time.
Therefore it is clear that a wine cellar must be valued at its open market value for Inheritance Tax purposes at the time of the relevant occasion of charge.'
Section 160 IHTA1984 states that for Inheritance Tax purposes the value of any property is the price it might reasonably be expected to fetch if sold in the open market at that time.
Therefore it is clear that a wine cellar must be valued at its open market value for Inheritance Tax purposes at the time of the relevant occasion of charge.'
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It should also be remembered that the notion of 'wasting assets' does not apply for the purposes of inheritance tax.
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