Tax advice of the week: Give your wife your wine

Contrary to some press reports, "there isn't and never has been" an inheritance tax (IHT) break on fine wines, says Tax Tips & Advice.

"For tax purposes, the value of any investment, including one in wine, will be the amount you could get if it were sold on the open market." Since cashing your investment in now could make you eligible for capital gains tax (CGT), consider carefully before you act.

The 'wasting asset' rule (under which any growth in value isn't taxed) doesn't apply to most investment wine because it only applies where the wine had an expected life of 50 years from the time you bought it.

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So what if wine didn't have an expected total life of 50 years when you bought it, but does now? You could give it to your spouse, as a CGT-free gift. Since they'll acquire it at a point when its expected life is less than 50 years, it'll then qualify as a wasting asset.

Or you could sell it bottle by bottle and use the CGT 'chattel exemption'. This says that where you receive £6,000 or less from the sale of a small good or chattel, there's no CGT to pay.