TAx Valuations – UK HMRC and International Taxation Agencies

HMRC and International Tax Valuations

Specialist Car Valuations is regularly instructed to research and create vehicle valuations for HMRC and other international tax agencies, including Dutch and Swiss authorities. Our varied HMRC tax valuation experience includes:

Import Valuations: When importing a vehicle into the UK, HMRC requires a valuation for customs duty and VAT purposes as part of HMRC NOVA. Using a professional valuer ensures an accurate assessment of the vehicle’s market value, which is essential for determining the correct tax liability.

Probate Valuations: In the event of someone’s death, the value of their assets, including vehicles, must be accurately determined for inheritance tax purposes. An independent vehicle valuer provides a fair market value of the vehicle at the date of death, which is required for the probate process.

Company Car Disposal Valuations: When a company disposes of a vehicle, whether through sale or transfer to an employee, the vehicle’s market value must be established for tax purposes. This value impacts the corporation tax relief the company can claim and any benefit-in-kind tax implications for the employee.

Sale of a Classic Car or Collectible Vehicle: If an individual sells a classic or collectible car, a valuation is needed to determine any potential capital gain. While private cars are generally exempt from CGT, classic cars (if considered an investment) may be subject to tax.

Inheritance Tax Valuation for Estates: When calculating the value of an estate for inheritance tax purposes, all significant assets, including vehicles, must be accurately valued to determine the total estate value and any tax due.

Gifting a Vehicle: If a vehicle is gifted and the donor passes away within seven years, its value at the time of gifting may need to be assessed to determine any inheritance tax implications.

Company Cars and Benefits in Kind: For employees who receive a company car, the value of the vehicle affects the taxable benefit-in-kind amount. Accurate valuations ensure the correct tax is paid by the employee.

Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) in Sale of Business Vehicles: When a business disposes of vehicles, accurate valuations are needed to calculate any relief or tax due on the disposal. This is particularly true of vehicles which may have been restored by the business or while in business ownership.

Accurate Valuations for Insurance: While not a tax situation per se, accurate vehicle valuations are crucial for determining insurance premiums and ensuring fair settlements in the event of a claim. This can impact tax indirectly if the vehicle is a business asset.

Tax Planning and Asset Wealth Management: For high net worth individuals, accurate valuations of all assets, including vehicles, are essential for effective tax planning and wealth management. This includes preparing for potential tax liabilities and optimising asset portfolios.

Depreciation for Accounting and Tax Relief: Businesses need accurate vehicle valuations to correctly calculate depreciation for accounting purposes and to claim appropriate tax relief on business assets.

Using an independent professional vehicle valuer who is recognised by HMRC ensures that all valuations are precise, defendable, and compliant with relevant tax regulations, thus helping in accurate tax reporting and minimising disputes with HMRC and other international tax authorities.

Swiss Tax Law – Wealth Tax – Vermögenssteuer/Impôt sur la fortune

Swiss Wealth Tax: Vermögenssteuer/Impôt sur la fortune

In Switzerland, the wealth tax (Vermögenssteuer/Impôt sur la fortune) is a tax levied on the total net value of an individual’s worldwide assets, including vehicles. The tax rates and exemptions vary by canton, and accurate asset valuation is critical to ensure compliance and correct tax liability. We provide valuations to collectors and expats in Switzerland for vehicles which live in the UK and elsewhere. Here are some key aspects of the Swiss wealth tax:

Overview

Taxable Assets:

• Real estate properties
• Bank accounts and savings
• Investments (stocks, bonds, mutual funds)
• Vehicles (cars, boats, aircraft)
• Jewellery, art, and other valuable personal property

Liability:

• Swiss residents are liable for wealth tax on their worldwide assets.
• Non-residents are liable for wealth tax on assets located in Switzerland.

Valuation

The value of vehicles is assessed based on their market value. This includes both personal and business vehicles. Accurate valuations are essential to determine the correct tax liability.

Tax Rates and Exemptions

Rates:

Wealth tax rates vary by canton (the regional administrative divisions in Switzerland). Each canton sets its own tax rates, thresholds, and allowances.

Generally, the rates are progressive, meaning they increase with the value of the assets. Rates can range from approximately 0.1% to 1% of the total net worth.

Exemptions:

Each canton may have different exemption thresholds. Typically, there is a base exemption amount below which no wealth tax is due. Specific exemptions or reductions may apply to certain types of assets or under particular conditions.

Example: Canton of Zurich

Taxable Threshold: CHF 100,000 for individuals (this threshold can vary).
Tax Rate: Progressive rates starting at around 0.1% and increasing with higher asset values.

Filing and Payment

Wealth tax is assessed annually and is typically filed together with the annual income tax return. Taxpayers must declare the market value of all taxable assets as of the end of the tax year (usually December 31).

Importance of Accurate Valuation

Accurate valuation of vehicles and other assets is crucial to ensure the correct amount of tax is assessed. Professional appraisals may be needed and are recommended for high-value or complex assets, including vehicles, to provide a defensible market value.

International Tax Valuations for British or Irish ExPats living overseas

Other International Wealth Tax Schemes

We provide valuations to citizens all over the world for a wide variety of purposes. The UK is a safe haven for assets and investments and many classic cars and motorcycles owned by international citizens are held in UK storage, including historic race cars and fully restored classic cars, which will never be exported.

Spain

Impuesto sobre el Patrimonio: This wealth tax applies to the net value of all personal assets, including real estate, bank accounts, investments, and vehicles, above a certain threshold. Rates and exemptions can vary by region.

Norway

Formuesskatt: This wealth tax is levied on the net value of personal assets, including real estate, bank deposits, shares, and other assets, above a specific threshold.

Netherlands

Box 3 Wealth Tax: The Dutch tax system includes a tax on deemed income from savings and investments, effectively functioning as a wealth tax. We have provided valuations to Dutch citizens for overseas asset valuation purposes.

Italy

Imposta sul valore delle attività finanziarie detenute all’estero (IVAFE): This tax applies to the value of financial assets held abroad.

Argentina

Impuesto a los Bienes Personales: This wealth tax applies to the net value of a wide range of personal assets, including real estate, vehicles, and financial investments, exceeding a specified threshold.

Colombia

Impuesto al Patrimonio: This wealth tax is levied on the net value of personal and corporate assets exceeding a certain threshold.