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How should the works created by an artist be valued in the accounts that are prepared up to the date of his death?
An artist has died leaving a considerable number of paintings which he created over the years. In his accounts it would appear that little or no value has been placed on them which would appear to be correct if they were speculatively created and not to order.
However in the final set of accounts to the date of death should we bring the stock in at its market value even though this will of course result in a large income tax liability?
If we do not what value should be included in the inheritance tax account – just cost? The paintings pass to his wife who will sell some of them so the base cost is relevant for capital gains tax.
However most are likely to sell for less than £6 000 so will we assume benefit from...
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