This is all very good news delivered from the experts, I have now removed the rope from the rafters.
Thank you Peter Holmes
Thank you Peter Holmes
Does this mean that these vehicles are also imune from the dreaded inheritance tax????
Tony
Tony
Sorry, no. The value of these assets is added to everything else when considering whether IHT is payable on your overall wealth after you have died. Any gifts between husband and wife, be they lifetime or on death, are exempt. As is anything which was given away more than 7 years ago.
Which is why the behavior of Charlie Cannon and other has been so unhelpful, following the death of John Lumley. Those of you who have offspring should be putting the bikes into their names now or finding some other way to transfer the title of the bikes. Just the ownership of a house in several parts of the UK will put you into the inheritance tax bracket without any savings or other assets. If you have several bikes then it is likely that your descendants will now have to sell at least one to pay the IHT on the rest. If this is done through an auction then the auction house is likely to take about 35% out of the price in total. The flapping of wings as the twin vultures of the tax man and the auction houses settle to pick out the eyes before the corpse is even dead is a sound we are going to have to either live with or find a way around.
Out of curiosity, the USA's Inheritance tax doesn't even apply below $300,000 ($600,000 for a couple) and even then there are enough deductions a good tax man can find, to keep it to almost nothing for a lot more than that. Just how bad can it be in the UK?
Cheers, John
Cheers, John
John, I am no expert on financial matter so what follows is what I understand the situation to be. The problem over here is that in much of southern England and in various other hot spots the price of houses is ridiculous. Even ignoring inner London which is probably like other capital cities, a very modest house in the south east of the UK will cost £150 - 200,000. A couple of derelict cottages with some land in the same area is about £600,000. I know someone in Cambridge which is one of the hot spots because it is only about an hour from London by train who had a queue of people outside a four bedroom detached house for sale in excess of £1.5 million. A terraced house (?town house in the USA) is going to cost over £0.5 million in the same area. Certainly there are areas of the UK where prices are much lower but if the area in which they exists is run down and then gets an area reconditioning the prices go up. Death duty (Inheritance tax) starts at £325,000 at the moment, if I have that figure correct, for one person and double that for a couple. Suppose you are single, and it is very likely that in the end you or your spouse will end up single, have a house and a couple of Vincent twins at £40 - 50,000 each. Then you, or your descendants, are liable for 40% of everything over the £325k mark. A modest house and one series 'A' twin, will take you into the tax bracket. Those of us who have owned Vincents for years because we like them, with no thought of their value or regarding them as investments, now see the grubby hand of the tax man hovering over our pride and joy. What deductions we could invoke over here I do not know (remember that I am no expert on this) but I suspect that they are very few. I have been hoping to provoke some of our more financially competent members to make a contribution to this discussion by this and some of what I have written before. My guess, and I emphasize guess, is that a Trust or Charitable Trust to take ownership of the bikes would be a way forward. What was once a tax to try to prevent the landed gentry from owning the whole of the UK has now become a burden up normal working class or middle class people and following the fuss made by certain people recently the tax man is now aware that Vincents used for transport and pleasure can be regarded in the same way as the most empty and vacuous of financial investments.
I just gave all my bikes away today to my unnamed friends ,if I die in 7 years does this clear me of any claims the tax man might try to claim on my things.
I do not know the law in the USA but my understanding of English law is that there will be no liability of any sort, either on your estate or upon your friends, on those bikes upon your death. That was the John Lumley problem. He made it quite clear as to what he wanted to happen to his bikes years before his death; he informed me as to what he wanted to happen to his astronomical bits and pieces and upon learning of his terminal condition, he again made it clear to his family what was to happen to the bikes, all of which were in small parts. His, and his family's, wishes were carried out but due to interference from people who had nothing to do with the situation there is now a huge tax liability and his terminally ill 84 year old brother and his wife are now being hounded to their graves. He had paid £1,000 for the whole lot may years ago but that makes no difference to the tax man. I suppose that the tax man and the other piles of p-o sleep soundly in their beds at night but they shouldn't.
I am just a little confused, if there is no tax liability on bikes and parts gifted to friends or relatives why has the John Lumley problem escalated to a massive tax bill. In making this inquiry I am in no way condoning the abhorrent actions of these odious members or ex members of our club, any person that jumps into bed with the taxman to wreak their jealous vengeance is simply despicable. I am with you Norman, how do they sleep.
The problem is that the gift has to be made seven, or more, years before the death of the original owner. Although John made it clear what he wanted at least that much time before his death he had done nothing formal about it such as transferring the title of the bikes at Swansea. Most of us procrastinate on the assumption that we still have many decades to go before we have to do something formal and under most circumstances this would be fine. The problem arises when people who have nothing to do with any of the people involved draw the attention of the tax authorities to the potential value of the bikes now. Having had their attention drawn to the circumstances one would have hoped that a reasonable and sympathetic tax person might have decided that the matter was all 'in family' and walked away from it. Not in this case. I have not seen what information was sent to the tax authorities but I have seen some of the information which was intended to be put on the web. Much of it is incorrect or downright lies and I have done my best both verbally and in writing to try to correct the lies to the persons involved. Clearly they do not want the facts to get in the way of their own agenda, whatever that is! For the rest of us in the UK I imagine that a solution to this problem might lie along the lines of the fact that one can be the 'keeper' of a bike but not the 'owner'. An example of this is if one buys a bike on a hire purchase agreement. Until such time as the contract is completed one is the keeper of the bike but the finance company is the owner. Once again I emphasize that my competence with either financial or legal matters is minimal and it would be very useful if any Club members who have professional level competence in these matters could put the rest of straight on this subject.