What are Chattels and why is it important for the value to be known for the sake of the beneficiaries?
Chattels are commonly defined as ‘moveable property’. In terms of a deceased estate ‘chattels’ will include the personal property of the deceased such as furniture, jewellery and personal items and other property not including real property.
It is important for the value of a deceased’s chattels to be known, as it will affect the beneficiaries of the deceased’s Estate in a number of ways.
Capital Gains Tax
Capital Gains Tax is a tax on the difference between the value of the asset when the deceased bought it and the value of the asset when you received it under the Will.
It is important to know the value of chattels of the deceased, so that the beneficiaries are able to ascertain whether there is any Capital Gains Tax payable, or whether the chattels are exempt from Capital Gains Tax. For example, most personal use chattels such as furniture are exempt from Capital Gains Tax, as long as their value was less than the statutory amount when they were purchased by the deceased. However, some collectable items such as jewellery and artwork may be liable to Capital Gains Tax.
If the deceased died without a valid Will, then the deceased’s Estate will be distributed in accordance with the laws of intestacy set out in the Succession Act. The value of the chattels in the Estate will need to be known, in order for the distribution to statutory beneficiaries. Depending on the intended beneficiaries the statutory rules leave assets of a certain value to the deceased person’s spouse (in certain circumstances)which requires the value of the assets of the deceased to be known.
Family Provision Claims
If the Estate is subject to a family provision claim, then it is also important that the value of the chattels are known so that the Court can ascertain the value of the Estate when making orders to vary the distribution under the Will.
If you are a beneficiary under a Will and have been gifted with a Chattel of the deceased then you should talk to an expert Wills and Estates lawyer on the effect of this inheritance. In particular why it is important to know the value of the chattels received by you and any other beneficiaries of the Estate.
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If you need advice about a Will or an Estate matter please call 02 9221 2779 or email firstname.lastname@example.org to arrange an initial consultation with principal lawyer Graeme Heckenberg at our centrally located Sydney offices.