Reynolds painting accepted in lieu of 4.7 million inheritance tax

In Canada, we don't have inheritance tax. We can inherit any amount from our parents and not pay tax on it. This is not the case in other countries. For example, in the U.K. there is such a tax, and for families with huge estates the tax bill can be daunting. In some cases, trying to come up with the cash to pay the bill would actually mean selling the bulk of the estate itself.

One of the ways the U.K. government deals with collecting these huge tax bills is by accepting valuable artwork and historic collections instead of cash. The items collected this way may make their way into British museums, or may stay in their original locations in huge manor homes, as long as they are viewable by the public (these manor houses are open for public tours). This works for the taxpayer, who gets to keep the house, land and the rest of the goodies. It works for the government, which collects and preserves important items that document the history of the nation.

Of course this doesn't work for the average man in the street, who doesn't own a portrait of titled ancestors that he can trade to the tax man. Then again, the average man on the street doesn't owe several million in inheritance tax.

The Arts Council England has recently announced that it has accepted a portrait of the 5th Earl of Carlisle, painted 200 years ago and passed down through the family that owns Castle Howard in Yorkshire to settle an inheritance tax bill of 4.7 million pounds (about $8,000,000 Canadian dollars). Click here to read the story and see the portrait.

This seems to be a workable scheme in the U.K. where the huge, fabulous manor houses have stood for hundreds of years and are chock full of historic valuables. Here in Canada, our history is much younger and we never did have a system of lords living large up in the big house. We don't have castles dotting the landscape the way the U.K.does. There really is no possibility of setting up a similar system here. However, it's interesting to see how a system with inheritance tax affects the citizens. And of course it's interesting for us to get a glimpse into how the rich and famous live.

The attached portrait of Castle Howard accompanied the article mentioned, and is credited to Richard Watson/Getty Images.