My husband and I are selling our second home in France and would like to ship some furniture, clothes and artworks to the UK.
Unless you are an exporter or importer, the guidance put out by HM Revenue & Customs is opaque. The furniture, which is 20 years old, was bought in France but most of the clothes and artworks were bought in the UK. Can you give us any advice on how to value and declare items on the obligatory customs forms post-Brexit?
Debbie Jennings, VAT director at accountancy firm Moore Kingston Smith, says people moving their residence from the EU to the UK can move their personal effects or household goods under transfer of residency rules and, subject to meeting certain conditions, this is normally free of customs duty and free of import VAT.
However, the exemption does not apply when it is a second home. Customs duty (if applicable) and import VAT will be due when you import these goods to the UK.
The value of the household goods and personal effects will be based on their current second-hand value. The best approach is to draw up an inventory list of the goods being moved to the UK with an estimated second-hand value. The second-hand value should be realistic, in case HMRC challenges it.
Furniture tends to have a 0 per cent custom duty rate at importation, whereas clothing can attract up to 12 per cent. Both will attract import VAT at 20 per cent. The amount due will be calculated against the second-hand value, which may well be low if items are more than 20 years old.
Artwork and antiques usually attract a 0 per cent customs duty rate and, since January 1 2021, the reduced import VAT rate of 5 per cent applies. To qualify as an antique, there may be a requirement to hold proof that the item was produced more than 100 years ago.
If the goods were originally purchased in the UK, then return goods relief (RGR) may be available. Under RGR, customs duty and import VAT are not payable, although evidence that the goods were purchased and exported from the UK should be available. Usually, HMRC looks to have proof of export and re-import within a three-year period. However, HMRC can waive these timescales under “special circumstances” — but of course this cannot be guaranteed.
There are many removal companies that specialise in moving household or personal effects internationally, and who will be able to assist with all aspects of the move and customs declaration. This includes identifying the duty rate applicable for the goods, which can be complex, as you have already found following your call with HMRC’s helpline.
We would suggest the next steps. First, compile an inventory list describing the goods, both new and old, and their estimated values. This will be needed for the declaration at import to Britain. Second, ensure any artworks or antiques are separately identified due to their favourable duty and import VAT rates, and proof of age held where necessary. Third, identify the potential customs duty and import VAT due on the items. Finally, consider whether you wish to explore RGR to reduce this amount.
After 18 years of marriage, my husband and I have decided to go our separate ways. This isn’t a decision we have taken lightly and as we have two young children together a stressful court battle isn’t something we wish to partake in. We both want to approach this as amicably and cost-effectively as possible. My husband has suggested mediation, which isn’t something I have come across before and he has said we may be able to apply for a £500 voucher from the government. Is this something we could or should explore?
Jamie Gaw, senior associate at law firm Forsters, says it sounds like mediation would be a good option for you and your husband to sort out the arrangements for your children and financial matters arising from your separation.
It would involve you and your husband meeting together with a neutral facilitator who would help guide you towards agreement, through a few meetings, which can be in person or via video conference. The number of meetings will depend on the extent of the issues and how quickly you can resolve them.
Any agreement you and your husband reach is subject to you each having an opportunity to take legal advice (although some couples choose not to do so). A mediator cannot give legal advice, but he or she can provide information and will ensure you reach agreements which are sustainable. Therefore it can be useful to work with a legally trained mediator, as he or she will be able to tell you if the agreement reached is outside the scope of what a court would order.
While a mediator will help you to work through all the options to reach a solution, you and your husband will decide what course the discussions take. For mediation to have the best chance of success couples need to go into the process with an open mind, listen to each other and be prepared to compromise. This is why mediation is particularly suitable for couples who are on relatively good terms, as it sounds is the case with you and your husband.
Given your objectives, I can see many benefits to mediation. First, a successful mediation process is considerably cheaper than contested litigation. Second, it avoids the stress and acrimony of court proceedings. Third, because you are in control, mediated agreements usually stick more readily than those imposed by a third party, reducing the likelihood of future disputes. Fourth, it can help a separating couple to communicate more effectively with one another, to enable effective co-parenting.
Usually in order to gain access to government funding for mediation at least one of the parties has to be eligible for Legal Aid, for example if they are on a low income or receive certain means-tested benefits. However, under the new time-limited government mediation scheme that applies in England and Wales, around a further 2,000 families can apply for a £500 voucher towards the cost of mediation, without being means-tested. Only couples discussing issues relating to children are eligible to apply, and only mediators authorised by the Family Mediation Council are taking part in the scheme.
Lastly, it is worth mentioning that mediation, while highly effective, is not the only alternative to court. Other options include collaborative practice, arbitration and out of court solicitor negotiations.
The opinions in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect result arising from any reliance placed on replies, including any loss, and exclude liability to the full extent.
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