Anyone who owns art, vintage cars or expensive watches has certainly asked themselves whether and starting when these must be declared in the tax return. Unfortunately, the answer is not as simple as one would wish, because the difference between assets and household effects is sometimes difficult to define.
Household goods or assets
Does the picture on the wall belong to the assets or is it merely a tax-exempt household good. This question is a matter of concern not only for experts, but also forthe tax authorities themselves. There is no fixed rule in this regard. In principle, paintings by lesser-known artists that primarily serve a decorative purpose are not taxable. However, as soon as the works exceed a certain amount,the object must be taxed as property. The only problem here is that the tax authorities have not set a fixed amount.
However, an important clue is provided by the insurance. If art insurance is taken out for the work in addition to the usual household insurance, it is probably more than just decoration.
Often, a determining factor can also be the number of art objects. A single work istreated differently than a complete collection. If there is also regular trade in the works, the tax authorities even speak of a commercial activity.
At what value must an art object be recorded in the tax return?
At what amount does the work have to be taxed? The insurance sum is a good indication. However, the insurance sum and the market value can be very different under certain circumstances. Especially if objects have been in thefamily for a long time or rarely change hands. It is even more difficult with objects that have practically no market, such as extremely rare paintings or antiques. The determination of the tax value becomes a Herculean task. To ensure that the works are not overvalued, it is worth declaring them and creating transparency. Ideally , one should not give the tax administration any reason to become skeptical.
Watches, jewelry and vintage cars
Watches, jewelry and vintage cars can also be potential investment objects. Here again, insurance is an indicator of potential tax liability. However, objects that are reasonably suitable for everyday use do not normally have to be declared. However, entire collections of vintage cars or watches should be listed in the tax return. Fortunately, the fair market value of such objects can be easily determined, as they are usually not rarities.
