The handsome 18th century silver tankard on the desk in front of me as I type presents me with some intergenerational financial planning dilemmas. It has been in my family since it was made. Now the question is: what should I do with it?
It was crafted by Messrs James Stamp and John Baker in London in the first decade of the reign of George lll. Date marked 1769, it is a fairly standard design.
At roughly 50p a gram, the scrap-silver value of the tankard’s 750 grams is about £375.
That said, Georgian silver is mostly worth more than the pure metal and, judging by the asking price of several very similar objects in design, date and size, I might get somewhere between £1,000 and £2,000 for it.
But the difference between what you can sell something for, to a dealer or at auction, and what you might have to pay for it can range from 30 per cent to 100 per cent.
My tankard has been a poor investment, especially over the 30 years I have owned it. In 1990 a smart West End jeweller valued it for insurance at £2,500. Insurance values tend to be ambitious, so I conclude it has stayed roughly the same in nominal terms. If it had just kept pace with 2.8 per cent annual average inflation, however, it would now be worth £5,725.
Deciding for the best
What should I do with this unprofitable investment? Someday it will form part of my taxable estate and someone will have to find 40 per cent of its value.
I could sell it or gift it. The tankard counts as a chattel (tangible moveable property), so such a disposal would come under the special capital gains tax exemption for chattels if there were a gain. But the proceeds of sale or the value as a gift would, sadly, be less than £6,000 (the chattel’s exempt figure), so I wouldn’t need to enter the transaction in my tax return — although it would be sensible to make a record of the gift for inheritance tax, in case I keeled over in the following seven years.
If the object were worth more than £6,000 but not more than £15,000, some complex arithmetic means I would have to multiply the excess over £6,000 by five-thirds to calculate the maximum chargeable gain. On values over £15,000 the normal CGT rules apply.
Would my children want such an item? And whom should I give it to? Neither of them greatly enjoys cleaning silver, and they have told me that having an item so eminently nickable in their home is not something they want. That was my mother’s view too; on inheriting it, she promptly put it in the bank where it stayed for several decades.
The grandchildren might appreciate the tankard and other family things but are probably still a little young to have a fixed view.
Possessions often cause massive quarrels in families. Disputes can come to the boil after a death, but they may bubble along in the years before. Financial advisers of decades’ standing will tell you of epic fights over jewellery, pictures, even toy-soldier collections. I remember a client telling me how she always felt her children eyed up all her possessions whenever they came to visit her — so much so that she made a list of every item and earmarked them specifically for each of her potential heirs.
Nevertheless, if material things have the power to make people miserable, they can also bestow happiness. I hugely enjoy drinking from my tankard from time to time — although it is a little ostentatious. It would be a fine thing for it to stay in the family for a little longer and perhaps for many more generations too. So it won’t be me who sells it.
There is a growing awareness of family continuity and identity, and it isn’t all due to Ancestry.com and TV shows such as Who Do You Think You Are? The role of advisers in helping clients to manage the difficulties of passing on money, and possessions like my tankard, is both worthwhile and important.
Danby Bloch is chairman of Helm Godfrey and head of editorial strategy at Platforum
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