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Investing in Art

Any other investment discussions eg. peer to peer lending
Dod101
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Re: Investing in Art

#510914

Postby Dod101 » June 30th, 2022, 4:37 pm

Adamski wrote:I'm going to give an opposing view that investing in art (and valuables) is a way of avoiding IHT.

An estate will typically put a notional value on contents ie £500, not actually list the goods.

HMRC can check your IHT return through their computer program, which will include records of bank accounts, investments and via the land registry. They'll have a detailed picture of our savings and investments from our tax returns if you qualify for them, and home ownership from the land registry.

But they are unlikely to rock up at your old address after you/we are gone searching for ipads, electronic goods, art, jewelry, gold coins, etc. and checking their ebay value.

So potentially having some valuables at home is a way around IHT (40%).

Although of course strictly speaking your descendants would disclose such items - I doubt many do, unless very high value.


When my first wife died which is nearly 25 years ago, my solicitor told me when he was completing the IHT forms that as it was a sizeable estate (it was well into seven figures), HMRC would be likely to ask about the value of any jewellery if we did not put something in against that. I suspect if you were to put £500 as the value of goods and chattels that would also elicit a query against most estates. In any case the discussion was about legitimately avoiding IHT not being knowingly dishonest.

Dod

pje16
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Re: Investing in Art

#510916

Postby pje16 » June 30th, 2022, 4:43 pm

They WILL ask on a large estate like that
that (the size) is what triggers the enquiry

Charlottesquare
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Re: Investing in Art

#514002

Postby Charlottesquare » July 13th, 2022, 1:45 pm

Dod101 wrote:If I were buying art, it would have to be something that I liked and I cannot see anything in this artists work that would interest me. Besides, we are only talking about £7,000 per canvas or so, so not much help (even if it were to be IHT free, which it would not be) in ameliorating IHT.

The best way to help with IHT is to give away assets and then endeavour to live for a further 7 years.

Dod


Agreed- whilst we have not paintings that are individually very valuable we do now have a few original works which we hold because we like them, they have crept up in value over the years, though I would certainly not buy them as investments. If I was buying portable items it would more likely be jewellery, especially Victorian or early 20th century.

Charlottesquare
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Re: Investing in Art

#514005

Postby Charlottesquare » July 13th, 2022, 1:49 pm

Adamski wrote:I'm going to give an opposing view that investing in art (and valuables) is a way of avoiding IHT.

An estate will typically put a notional value on contents ie £500, not actually list the goods.

HMRC can check your IHT return through their computer program, which will include records of bank accounts, investments and via the land registry. They'll have a detailed picture of our savings and investments from our tax returns if you qualify for them, and home ownership from the land registry.

But they are unlikely to rock up at your old address after you/we are gone searching for ipads, electronic goods, art, jewelry, gold coins, etc. and checking their ebay value.

So potentially having some valuables at home is a way around IHT (40%).

Although of course strictly speaking your descendants would disclose such items - I doubt many do, unless very high value.


Catch is for items/sets > £x they likely need individually disclosed in house insurance policy, if I am HMRC I can just ask for sight of same, so either under insure and run that risk or carry multiple items all individually below £x (though if gross over £y insurers may ask for list anyway)

1nvest
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Re: Investing in Art

#515296

Postby 1nvest » July 18th, 2022, 1:05 pm

Dod101 wrote:If I were buying art, it would have to be something that I liked and I cannot see anything in this artists work that would interest me. Besides, we are only talking about £7,000 per canvas or so, so not much help (even if it were to be IHT free, which it would not be) in ameliorating IHT.

The best way to help with IHT is to give away assets and then endeavour to live for a further 7 years.

Dod

Is that not a primary reason why the rich strive to own a farm (IHT exempt), art, gold (physical in-hand transportable assets). A-third, a-third, a-third ... mantra (land/art/gold). A painting might appear at a auction where its present owner may be anonymous and/or disputable. Bought by his recently passed Dad in his own name 20 years ago, but claimed to have been gifted to his son soon after purchase such that it was outside of Dad's estate. Assets with no paper trail (no regular dividends paid to associate to a particular individual) that might be transported internationally (albeit perhaps illegally in some cases).

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Re: Investing in Art

#515313

Postby WickedLester » July 18th, 2022, 1:43 pm

I often buy watercolours and the odd oil painting at boot sales and in charity shops. Being relatively close to Maldon and Burnham on Crouch you often find quite nice work by local artists and I particularly like marine pictures and pictures of Thames Barges. I hang them on my wall until I am bored of them and then swap them for something else. When you're only paying £2 or £3 for a framed picture you can't go wrong even if you get it home and decide it's junk after all.

My most recent "investment" was two equine watercolours by well regarded Warley artist Tracy Sodeau which I paid £9 for and sold on eBay for £90.

It's never going to make me rich but it gives me pleasure and pays for itself.

mc2fool
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Re: Investing in Art

#515325

Postby mc2fool » July 18th, 2022, 2:50 pm

WickedLester wrote:My most recent "investment" was two equine watercolours by well regarded Warley artist Tracy Sodeau which I paid £9 for and sold on eBay for £90.

Or possibly Katy Sodeau? ;)

https://www.google.com/search?q=Katy+So ... s&tbm=isch

WickedLester
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Re: Investing in Art

#515327

Postby WickedLester » July 18th, 2022, 2:57 pm

mc2fool wrote:
WickedLester wrote:My most recent "investment" was two equine watercolours by well regarded Warley artist Tracy Sodeau which I paid £9 for and sold on eBay for £90.

Or possibly Katy Sodeau? ;)

https://www.google.com/search?q=Katy+So ... s&tbm=isch


Oops, my mistake, I did mean Katy Sodeau!

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Re: Investing in Art

#515330

Postby Lootman » July 18th, 2022, 3:18 pm

Dod101 wrote:
Adamski wrote:I'm going to give an opposing view that investing in art (and valuables) is a way of avoiding IHT.

An estate will typically put a notional value on contents ie £500, not actually list the goods.

HMRC can check your IHT return through their computer program, which will include records of bank accounts, investments and via the land registry. They'll have a detailed picture of our savings and investments from our tax returns if you qualify for them, and home ownership from the land registry.

But they are unlikely to rock up at your old address after you/we are gone searching for ipads, electronic goods, art, jewelry, gold coins, etc. and checking their ebay value.

So potentially having some valuables at home is a way around IHT (40%).

Although of course strictly speaking your descendants would disclose such items - I doubt many do, unless very high value.

When my first wife died which is nearly 25 years ago, my solicitor told me when he was completing the IHT forms that as it was a sizeable estate (it was well into seven figures), HMRC would be likely to ask about the value of any jewellery if we did not put something in against that. I suspect if you were to put £500 as the value of goods and chattels that would also elicit a query against most estates. In any case the discussion was about legitimately avoiding IHT not being knowingly dishonest.

I didn't take adamski to be recommending dishonesty but rather just noting that in practice executors often do not understand the value of physical items, and that those items are not documented the way financial assets usually are.

I inherited a painting from my father that was of his mother as a child. I was also the executor and it never crossed my mind that it had anything other than sentimental value. But some years later I discovered that it had been painted by a moderately well known Victorian/Edwardian portrait painter who had been in the area to paint the local aristocrat, but saw my grandmother in the village and decided to do her portrait as well.

The value is not huge but had I known of its provenance and value I should have included it in the estate. But it never crossed my mind to do that and the omission was not picked up during probate. It is hard to see how it could have been. Like you I just put a single reasonable and proportionate amount for all the chattels and that was accepted.

That said the only thing I collect are coins and those are fairly easily valued using online guides.


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