Court of Appeal Sets Aside Financial Remedy Order
The Court of Appeal has upheld a man’s argument that the financial remedy order made on his divorce should have been set aside because the wife had given inaccurate evidence...
Continue readingEver since 1925, under s.55(1)(x) of the Administration of Estates Act, the statutory definition has remained unchanged.
However, in 2014 the long-standing definition of personal chattels has been reformed. Now the statutory definition for ‘personal chattels’ is “tangible moveable property” excluding those items used at the date of death solely or mainly for business purposes.
This new condensed definition has not brought about any change as to the meaning of ‘personal chattels’. Quite simply, the term ‘personal chattels’ means someone’s personal belongings.
But when a person dies, leaving behind perhaps a house full of sentimental items it is quite a daunting task to value them. The value of personal chattels must be considered by the Executors and entered into the inheritance tax return.
So what exactly do you need to include? Broadly, any item of personal use and the contents of the home but excluding money and things used for business purposes, which may need to be entered separately. Therefore items such as furniture, pictures, paintings, china, TV, audio and video equipment, cameras, jewellery, cars, caravans, boats and antiques etc. should be included. If the asset is used for both business and personal use, it would probably fall outside this definition. Items that also fall outside this definition are items of gallantry, such as the Victoria Cross, and inheritance tax is not paid on these items.
The value that these personal chattels are given is the open market value of the items at the date of death. In other words, the price that such an item is likely to fetch if it was sold at auction on the day the deceased died. You should be careful not to use reinstatement or insurance value. You can use publically available information to value these assets.
However, HMRC advises that you only get a professional valuation if the items are valued at over £500.00. This is of course not always necessary and is at the discretion of the Executor. However, in estates with a large number of high value assets, it would be essential. The valuer will provide you with an open market value at the date of death, which will then be annexed to the tax return.
Here at Hubbard Pegman & Whitney LLP, we have a dedicated team of Probate Specialists who have experience in dealing with a wide variety of personal chattels. Please contact Outi Hubbard, Sarah Ellis or Florence Nevill on 0208 735 9770 for more information on how we can assist.
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