As the 'great wealth transfer' gets underway, what are the current inheritance tax rules?

""We are still in the early days of the so-called great wealth transfer," says the lawyer Pierre Valentin, the joint head of art law at Fieldfisher. "The wave started in the US with the sale of collections such as those of Sydell Miller, Mica Ertegun and more recently, Leonard Lauder. The wave is coming to Europe, for example with the auction of the collection of Pauline Karpidas [last] September. I expect that there will be many more of those 'white glove' sales in the next 10 to 15 years because younger collectors collect differently from their parents and grandparents.""

""Each person is allotted a lifetime exemption from estate and gift taxes (currently set at $13.99m per person or $27.98m per married couple, though this amount is set to go up to $15m per person or $30m per married couple this year). Up to 40% tax is charged on the estate's value over this threshold. On top of the federal tax, a few states impose their own "inheritance taxes" (tax charged to the beneficiaries on assets received): Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania.""

Large volumes of material from estates of deceased collectors are appearing at New York auctions and are expected to become routine as acquisitive Baby Boomers pass away. The great wealth transfer began in the US with notable sales such as Sydell Miller, Mica Ertegun and Leonard Lauder, and is arriving in Europe with sales like Pauline Karpidas's collection. Many more 'white glove' sales are expected over the next 10 to 15 years because younger collectors collect differently. Inheritance tax considerations often trigger estate sell-offs. In the US, estate taxes can be imposed at federal and state levels with significant exemptions and rates up to 40% over thresholds.

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