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Hilesh Chavda’s series on tax & estate planning | I. Protecting your treasures for the future

In the first in a series of articles on estate and tax planning for art collectors, Hilesh Chavda, Private Client Partner at Spencer-West LLP, talks to Lucinda Blythe at The Pedestal about the importance of planning ahead.

PROTECTING YOUR TREASURES FOR THE FUTURE

Some people may purchase one or two pieces to furnish their homes, others may be ardent collectors with museum quality collections. Wherever you sit on the spectrum, one thing remains the same: Love for the treasured pieces that you worked hard to find and have cared for.

It is understandable that you worry about what is going to happen to your precious possessions and collections when you leave this mortal coil. The question is how to protect these pieces.

Where there’s a will there’s a way

It is not enough to worry. Something needs to be done. This is where a will comes in.

Seemingly simple but sometimes overlooked and often not given proper thought. This document will control what happens to your possessions on your death. With careful thought and expert advice your will is a powerful document that can provide peace of mind.

Who should benefit?

You may have very clear ideas to whom your prized possessions should go. It might be a loved one with the same passion for your treasures. It might be that you want a charity or museum to have a collection that you have pieced together over many years. Whatever your wishes, you can only be sure they will be carried out on your death, if you put them in your will.

Preserving your collection

Particularly if you are an avid collector, you may want your carefully curated collection to stay intact. It would be a shame for individual pieces to be sold off to pay taxes or the collection split between various beneficiaries. Whole collections can be bequeathed to a beneficiary (a loved one, museum or charity). You may also want to do more sophisticated planning, such as establishing trusts, to ensure collections are kept together for years to come.

Tax doesn’t have to be taxing

Tax can be an issue if not considered carefully. Inheritance tax is a fact of life. However, a rather prosaic problem is how the tax bill will be paid. It would be sad to see your possessions sold to settle a tax bill if you wanted your loved ones to keep them. A properly drafted will can help prevent this from happening. You can also specify whether tax is paid by the recipient of the pieces or it is to be settled from other assets in your estate.

There is planning that can be done too. For example, if your gift at least 10% of your net estate to charity you can benefit from a reduced rate of inheritance tax.

Finally

Whatever your wishes, they need to be reflected in your will. Without this, your prized possessions risk passing to the wrong people, collections being broken up or sold and unnecessary tax issues. With expert advice and careful consideration, you can protect your treasured possessions for the future.

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Hilesh Chavda, Private Client Partner, Spencer-West LLP | + 44 (0)20 7925 8080 | hilesh.chavda@spencer-west.com

 

Hilesh Chavda, Private Client Partner, Spencer-West LLP

Detail of floral marquetry from a mid-18th century writing table by Bernard II van Risenburgh

Detail from The Rest on the Flight into Egypt, Pier Francesco Mola (1612-66), oil on copper

One of a pair of elaborate German silver wine coolers by Wolf & Knell, Hanau, circa 1895 | sold at The Pedestal, Fine Interiors including Selected Furniture from Hotham Hall, Yorkshire, July 28 2020

Detail of the mermaid and dolphin side handle

George III carved mahogany octagonal tripod table attributed to Thomas Chippendale | sold at The Pedestal, Fine Interiors, April 30 2019

18th century tankard, British, soft-paste porcelain