CGT on "heirloom"

[gpietersz]

Not strictly business so hope not inappropriate.

I am selling an item bought by a deceased family member about 50 years ago. I was given it while living abroad, and brought it to the UK when I moved back there some years later. I have no evidence of its value at the time it was given to me, or when I brought it here.

At what point in time do I need to establish its value to calculate the gain? When I was given it or when I moved back here? How do I establish a value at that point in a way that keeps HMRC happy. Its art so not obvious and its hard to get historic prices. It will go for enough that there will be a CGT on it.

Finally, if I am going to need to get advice on this, how best to find reliable one off advice?

 

[numbersrule]

Did you hold UK Tax Residency at the time you received the gift?
Do you hold UK Tax Residency now when you are disposing of the asset?
Did the deceased family member hold UK Tax Residency when they gifted you the artwork?
Did the deceased family member claim any UK tax reliefs when gifting (disposing of) the art?
Did the deceased family member pass away within 7 years of gifting the art?

If the answer to the first three is yes and the last two no then your base market value would be at the time you received the gift.

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[gpietersz]

I was not UK tax resident when I received it. I do now.

The family member who gave it to me was not UK tax resident at the time and no reliefs were claimed.

Thank you, your answer was very useful. It is a nice summary of issues to look at and very reassuring.

Now I am just left with the problem of establishing what a work by a foreign artist was worth nearly 20 years ago!

 

[Newchodge]

So your answers are
No
Yes
No
No
?

Does that mean there is no CGT liability?

 

[UK Contractor Accountant]

I was not UK tax resident when I received it. I do now.

The family member who gave it to me was not UK tax resident at the time and no reliefs were claimed.

Any tax due on the gift, if any, would have been due in the tax residency country.

 

[numbersrule]

You may find some useful info in the below.
There may have been a Chargeable Gain at the time of your return.
It all depends on the timings.

https://www.litrg.org.uk/savings-property/capital-gains-tax/non-residents-and-capital-gains-tax

 

[numbersrule]

Is your current UK Tax Residency your first UK Tax Residency?

 

[Mark T Jones]

Will anyone ever know?

 

[gpietersz]

@numbersrule Not my first UK tax residency but I was away for over a decade so not temporarily non-resident.

From what that page says about chargeable gains that would only apply to a realised gain at the time I returned?

 

[gpietersz]

Does that mean there is no CGT liability?

There will be a liability, its a question of what I can subtract from the proceeds as the cost in calculating the gain.

 

[gpietersz]

Will anyone ever know?

HMRC will know the numbers I put down on on the form! I believe it will be the summary capital gains of my self assessment.

 

[UK Contractor Accountant]

There is no apportionment applied to capital gains on chargeable assets held by individuals whilst non-UK resident, but realised whilst UK tax resident. Nor is there any form of automatic rebasing of assets of any description when an individual returns to the UK.

From the above cost deduction will be the value of the asset at the time of the gift.

 

[gpietersz]

There is no apportionment applied to capital gains on chargeable assets held by individuals whilst non-UK resident, but realised whilst UK tax resident. Nor is there any form of automatic rebasing of assets of any description when an individual returns to the UK.

From the above cost deduction will be the value of the asset at the time of the gift.

Thank you, that is exactly what I wanted to know (and that there was no other effect of non-residence).