Apply for heritage relief: Protect your inheritance |
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Published
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Wed, 16 Mar 2005 01:00
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As Britain's annual inheritance tax (IHT) bill is set to double in nine years unless the threshold is raised in line with house-price inflation, a small loophole could prove to be the saving grace of millions of people.
Novelist Angela Huth inherited furniture on which no IHT had to be paid because her grandmother had smartly labeled it as “of national interest.” Officials say that around 85,000 objects qualify for so-called heritage tax relief. And in the past 20 years owners of these objects have saved more than £1 billion in IHT. If you are leaving any antiques items of national interest to the state on your death, their value will be used to offset IHT on the rest of your estate. Heritage relief is being seen as a new way to protect potential heirs from astronomical IHT bills.
| Commenting on Heritage relief, Patrick O’Brien of the Inland Revenue said: “Successive governments have considered that, so far as possible, heritage assets such as land, buildings and chattels should be conserved in private hands for the benefit of the community. The tax system therefore encourages private owners to retain heritage assets, as long as they give public access to them.”
There are two ways to get the relief; one is to apply for the conditional exemption scheme, which aims to prevent IHT forcing owners to sell items of national interest they have inherited. Richard Luscombe, a farmer from Cheshire, to escape IHT on a ceremonial sword, portraits and a letter from Nelson, used this scheme. He said: “I found it an easy process. I didn’t get the impression that the entry hurdles were that high, especially as the independent experts appointed by the Revenue are generally enthusiasts.”
Another way to get the Heritage relief is by making the objects available to the public on a certain number of days each year. You cannot charge them for viewing your articles. The Revenue may want to check up on this by sending someone pretending to want to view a piece of your collection.
However, before you consider the above-mentioned schemes, Heritage advisory agencies like Countryside Agency and the MLA, must deem that the items or places are of interest for them to qualify.
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