Inheritance Tax (IHT) is a tax on the estate of someone who has died, including all property, possessions and money. The standard Inheritance Tax rate is 40 percent.
Instead of using monetary gifts, the wealthy have put forward alternatives as a way to cover their bills.
HM Revenue and Customs collected £3.9billionn in inheritance tax from April to September 2023, which is £400million higher than the same period last year.
HMRC stated that recent interest rate rises may have encouraged the personal representatives of some estates to pay any tax duty sooner than they otherwise would have done.
Left with tax bills worth millions, those having to foot the bill have given gifts in lieu instead of paying the hefty bill.
1 Renaissance bronze Apollo
A miniature of an ancient Greek marble statue of Apollo, has been donated to the nation in lieu of a £10.5million inheritance tax bill.
The Apollo Belvedere was created 500 years ago by Pier Jacopo Alari Bonacolsi and is known as one of the finest Italian Renaissance bronzes ever made.
Known as Antico, the statue will go on display at the Fitzwilliam Museum in Cambridge – home to an outstanding collection of Renaissance and baroque bronzes.
The acquisition, under the government’s acceptance in lieu (AiL) scheme, will be formally announced by the Arts Council later this month. The bronze had been owned by Cecil Lewis, a property developer, and his wife, Hilda, who were philanthropists and art collectors.
The AiL scheme allows people to settle an inheritance tax bill by transferring important cultural, scientific or historic objects to the nation. In the past decade, the scheme has brought £479million worth of artworks and other objects into public ownership.
2 Shares in Samsung affiliates
Members of Samsung Group’s owning family are set to sell nearly 2.6 trillion won ($2 billion) worth of shares in Samsung affiliates to cover inheritance taxes, reports showed.
Since the death of late Samsung Chairman Lee Kun-hee in October 2020, his family members have been paying inheritance taxes in installments for the assets inherited according to a five-year scheme. The total inheritance tax amounted to 12 trillion won.
Under the scheme aimed at “inheritance tax payment,” Hana Bank is required to dispose of a 0.32 percent share Hong has in Samsung Electronics and a combined 0.18 percent share owned by the two daughters in the firm by April 30, 2024.
The Samsung Electronics shares up for sale amount to about 2.08 trillion won when the latest market closing price of 69,600 won per share is applied.
3 Paul Gauguin manuscript
The manuscript, illustrated with nearly 30 original images, has been allocated to the Courtauld under the Acceptance in Lieu scheme (AiL), satisfying £6.5mILLION of inheritance tax.
It is one of the greatest artist manuscripts to be acquired by a UK public collection since the Second World.
A sunkissed pissarro painting, a Queen Anne wine cistern and six etchings by Rembrandt are all gifts that have been bestowed upon the UK’s public collections as part of the AIL tax scheme, which brought in a record £65million in 2020, according to the Arts Council England.
AIL allows for inheritance tax debts to be written off in exchange for the acquisition of objects of national importance.
Its younger sibling the Cultural Gifts Scheme, also included in the report, allows for donors to give works during their lifetime in exchange for tax benefits.
Making a gift to one’s family and friends while they’re alive can be a good way to reduce the value of one’s estate for Inheritance Tax purposes and benefit their loved ones immediately.
Gifts include:
- money
- household and personal goods, for example, furniture, jewellery or antiques
- a house, land or buildings
- stocks and shares listed on the London Stock Exchange
- unlisted shares you held for less than two years before your death
People can give away a total of £3,000 worth of gifts each tax year without them being added to the value of one’s estate. This is known as their ‘annual exemption
