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Tax Planning Can Come in Many Different Forms…

By November 29, 2016January 29th, 2021Private Client

The auction of David Bowie’s eclectic art collection demonstrates the value of art as a tax-offsetting investment …The proceeds of the sale will be paid to Bowie’s estate. This means that the proceeds can be used to meet any inheritance tax (or similar estate taxes) that are due. Bowie’s estate was reported to be worth nearly $100 million, roughly £69 million, at the time of his death. If the estate was subject to UK inheritance tax £27 million would be payable.

Therefore, theoretically, the entire inheritance tax burden could be met by the sale of the art…It is…an asset class than can be disposed of in order to raise money, which is especially useful in asset rich but cash poor estates where the only other significant asset might be the main family home.

Many people think that inheritance tax planning is limited to either making certain types of tax exempt gifts in a Will (to a spouse or charity) or ensuring that there is a stash of cash hidden under the bed so that the kids don’t have to sell an organ to meet the tax liabilities once they’re gone.   The sale of David Bowie’s art collection, which has generated more than enough profit to cover what would have been a £27 million inheritance tax bill in the UK, demonstrates that there are more imaginative, and enjoyable, ways to plan for the big bill at the end of our lives.Tax planning is something that we should all consider, even if it seems unlikely at this stage that our estates will be over the threshold, because you never know when your lottery numbers might come up (or, more likely, that the government reduce the threshold) and thinking outside the box can make even the dullest of topics seem slightly more fun… 

Charlotte Hardie

Author Charlotte Hardie

Charlotte is a Solicitor in the Private Client department. Charlotte specialises in advising and acting for elderly clients or clients who lack capacity. Charlotte is well known for advising in the clients best interest, in a professional and friendly manner.

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