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Colin McLachlan
United Kingdom
991 Posts |
 Posted - 21/12/2017 : 08:39:20
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I have turned 70 this year, and looking around at the members I meet, I guess I'm not alone, indeed probably regarded as a youngster by some  . I have two sons, The older one who is very keen on my PA, and the younger who doesn't even like driving. My intention is to leave my estate equally to them both, with an option for the older to buy out the PA from the younger at market value.
I notice that George Eagle has offered his services as valuer in the past. I think that perhaps the Register should now (as we get older) consider formalising some sort of probate valuation service. As this would cover the whole country, perhaps we would need to consider regional valuers, and I think that at a minimum full reimbursement of travel expenses would be required. On top of that, there could be a fixed fee, either payable to the valuer or to the Register (or both).
I have no particular view on this myself, but simply put it forward as an idea for discussion. What do you think?
Colin
Markinch, Fife.
PA 0613
MG3242
Register No. 2591 |
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DickMorbey
United Kingdom
3677 Posts |
Posted - 21/12/2017 : 09:16:13
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Hi Colin,
I understand the point, which is something the committee has discussed many times before.
We are however constrained by MGCC policy, which strictly limits the scope of any valuations that Club CRBs' named officials can give. In fact the scope is extremely limited! We are only permitted to give valuations for the purpose of arriving at a sum insured for members wishing to insure their car.
That rules out pre-purchase/sale valuations, valuations for the purpose of IHT planning, probate, divorce or separations etc.
Very sorry, Colin - as I say the committee has been down this road before .....
Is there a practical alternative? Yes, probably and that is to use the services of one of the established traders or auctioneers in our cars, but the answer you will get will then depend very much on the question that is asked!
Dick Morbey
PA-PB 0743
Frieth, Oxon, UK |
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coracle
United Kingdom
1937 Posts |
Posted - 21/12/2017 : 12:59:02
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I have a few thoughts on this but the immediate one that springs to mind is that rather than: "with an option for the older to buy out the PA from the younger at market value." Colin could go for: with an option for the EITHER to buy out the PA from the OTHER at an agreed value. The value thus becomes self determining between them.
I suspect that if this came to fruition then whatever value was agreed would actually become the Probate value. |
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Onno
Netherlands
1045 Posts |
Posted - 21/12/2017 : 16:32:43
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The register becoming active in determining the value of triple M’s would be a very risky business imho.
As these cars increase in value (as they have over the past few years) the interests become higher as well and you could end up on the hot end of a dispute of an “wrongly” appraised car an have the register liable..
As a better alternative there must be commercial appraisers available?
Here in the Netherlands it is a custom to have you car appraised every couple of years so the insurer can calculate the insurance premium.
It is generaly accepted that these appraisals are a bit on the high side but that is easily rectified in a will by adding that the value is the appraised amount minus 10-20%
Sure the appraisal costs a certain fee but given the value of the cars it is only a small price to pay
Onno "D" Könemann |
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David R
United Kingdom
289 Posts |
Posted - 21/12/2017 : 23:19:16
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Colin
I am an English solicitor,although retired,and I never practised in this area of law. However,I have obtained Probate or Letters of Administration in relation to various family members or friends,so I have practical knowledge and experience of at least the system this side of the border. I doubt there are signifant differences in Scotland,particularly where a Will is left.
When Probate is applied for various Inland Revenue documents have to be submitted,primarily in relation to the assessment of any Inheritance Tax. The value of any car would have to be shown as part of personal goods. Your issue seems to be how that value is reached and to me it would seem that the easiest way would be either to use any insurance agreed valuation or to compare your car with the various ones for sale at that time either on the MMM website or with dealers or auction. From a Probate point of view I have never had any difficulties with the Inland Revenue or the Probate Registry over valuations provided they are reasonable and can be justified.
What you are in effect intending is that your elder son takes the PA as part of inheritance and his half share of your estate would thereby be reduced by the ascertained value of the car.Assuming both sons are aware of this intention and are agreeable to it then I would not see the necessity for a provision in your Will relating to a buy out of the car by the elder from the younger as,of course,the younger has no ownership anyway - that is with your Executors. If you do foresee difficulties between them,then a provision in the Will clearly giving the option for either to take any item (car or anything else) as part of their half share at valuation needs to be included.In the end it does depend on whether you trust your sons to deal with matters amicably or suspect they may fall out.
I obviously would advise you to take professional advice and have your Will drawn up by a Scottish solicitor.I am reliably informed that having a Will drawn up does not make you die any earlier!
David
J 3355(Probably going to my car mad eldest grandson).
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Edited by - David R on 21/12/2017 23:21:26 |
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Colin McLachlan
United Kingdom
991 Posts |
Posted - 22/12/2017 : 10:59:29
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Thanks for the replies. I can see the potential problem for the Register in the event of a dispute. An insurance valuation would generally IMO be higher than the true market value, which would therefore be unfair to one son. In any case my recent insurance valuations have been "self-declared", with accompanying photos. I doubt if there is an auctioneer north of the border competent to give a fair valuation. I may find a local friendly classic car dealer to recommend to my sons.
David, my will has already been drawn up with a suitable provision as recommended by my Scottish solicitor. It's only the valuation that concerns me. Inheritance tax is not an issue here (I should be so wealthy!). My sons get on well with each other, but sadly I have seen other families, previously amicable, torn apart by a dispute over a will. I know that, once dead, it's not my problem, but I'd like to minimise any risk of a family feud.
Colin
Markinch, Fife.
PA 0613
MG3242
Register No. 2591 |
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sven
Sweden
431 Posts |
Posted - 22/12/2017 : 11:29:00
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Colin
Why not sit down with both sons and all agree on a value, sell the car to the one that wants it with provision that you use it and maintain it as long as you can get in and out of it?
Just a thought.
good luck
Sven |
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Ian Bowers
United Kingdom
941 Posts |
Posted - 22/12/2017 : 12:12:46
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If anyone has a professional take on this, I would welcome their input.
On several occasions I have been told that cars of a certain age (veteran, vintage, PVT ?) are classed as 'wasting assets' and therefore exempt from death duty.
Is this correct, and if so at what age of car does it become relevant?
Ian Bowers
OD 6791
J3 3772 |
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coracle
United Kingdom
1937 Posts |
Posted - 22/12/2017 : 12:30:09
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| I think you will find it is Capital Gains Tax (CGT)that they do not suffer from rather than IHT. |
Edited by - coracle on 22/12/2017 12:31:12 |
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Simon Johnston
United Kingdom
6131 Posts |
Posted - 22/12/2017 : 15:23:01
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My solicitor told me that 'classic cars' are considered to be chattels and, unlike the family home, can't be forcibly sold to pay for residential care in a home for the bewildered. Which could presumably mean that the car is the only thing left after one pops one's clogs. What happens then if the motoring son can't afford to buy out the non motoring one?
Simon J
J3437 |
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coracle
United Kingdom
1937 Posts |
Posted - 22/12/2017 : 17:14:37
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Then one hopes the Judgement of Solomon is not invoked as there would still be an argument as to which would have the half with the steering wheel.
I guess it would have to be sold. |
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JMH
United Kingdom
911 Posts |
Posted - 22/12/2017 : 18:04:13
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| Ian, I would say that a car definitely forms part of an estate & all that it entails. Of course, in reality our cars are actually a liability & only become an asset once converted into cash - which might be several decades of more away for Colin's sons. One possibility is to gift the car to one son, with the legal provision that it can only be sold with the agreement of all three of you, protecting Colin whilst he's still motoring & both sons (to a degree) down the line. Best to speak to a solicitor who's an old car buff as they will themselves have pondered this sort of thing, all three can then voice their views - no surprises is key to keeping it all cordial. JH |
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Colin McLachlan
United Kingdom
991 Posts |
Posted - 23/12/2017 : 13:16:55
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Many thanks for all the replies.
Sven: nice idea, but No1 son (who wants the MG) is up to his eyeballs in mortgage and university debt, so cannot buy the car. I could perhaps lend him the money to buy it, thus creating a fixed debt repayable to my estate on my death. No money actually changes hands, but on my death what No1 son owes would be deducted from his share of the total estate. I may discuss that idea with them.
Ian, it's a long time since I worked in financial services, but at that time all cars of any age were considered exempt from CGT, but not IHT. I believe the thinking behind this CGT position was that what HMRC failed to collect on gains made on old cars, they saved on losses otherwise claimable on modern cars. In other words, if all cars were subject to CGT, then losses would be deductible, and there are more losses on new cars overall than gains on old cars.
Simon: interesting point. I plan to top myself before things get that bad, assuming I don't go gaga before I can make the trip to Switzerland.
Jeremy: That still leaves the problem of valuing the car (to balance the remaining estate), although it does give me the opportunity to get agreement from all three of us while I'm still alive to moderate the discussion. It the car were to soar or plummet in value in the meantime that could cause friction. This caveat also applies to Sven's idea.
Colin
Markinch, Fife.
PA 0613
MG3242
Register No. 2591 |
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Gordon
United Kingdom
692 Posts |
Posted - 23/12/2017 : 14:37:14
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Colin,
Another possibility is to stipulate that the car is to be sold and the proceeds to go into your estate. If financial state of sons or wishes to become the new owner change then this is all catered for. It does not stop one son from buying the car at that time.
Gordon
ex owner of PB 0331, MG4473
Derby |
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leckstein
USA
411 Posts |
Posted - 23/12/2017 : 15:08:00
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I have been hesitant to enter into this discussion as I am a lawyer, and I am also in such a situation. Three sons, one loves and drives the cars (there are several MGs) One is not interested, and one is working presently in Hong Kong, but may be interested.
In theory I want to divide the estate in thirds. And the difference here is that the one most interested in the cars also has the highest earnings. So it seems simple right? Not really. These are three brothers and evaluating the cars and using adding machines is so cold . I would rather make my intentions known to all three, and have the collection divided with various offsets, some with no special value. Hopefully they can adjust sentiment and money among themselves. I know this temps disagreement, but my executor is the oldest son who has no interest in the cars and is the least materialistic. He will have the final say if it comes down to that.
Mike L |
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DickMorbey
United Kingdom
3677 Posts |
Posted - 23/12/2017 : 15:50:16
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Mike,
Do you folks operate the principle of 'statement of wishes'? A non binding guide to the executors to indicate to them the decision they may, (or may not!) be inclined to arrive at upon the demise of the testator?
Dick Morbey
PA-PB 0743
Frieth, Oxon, UK |
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