The law sometimes has special names for things to avoid confusion between them. Personal property and chattels often boil down to the same thing, although this is not always the case. However, when solicitors speak of ‘chattels’ they should all be on the same page.
Much UK law is heavily under influence of Roman law, dating from 1066 and all that. ‘Chattel’ derives from the French word ‘chatel’, meaning goods, wealth, possessions, property, profit and cattle. While the French word in turn comes from the Latin ‘capitale’ meaning property.
Land, Chattels and Personal Property
The situation can become quite confusing when someone proudly says they bought property in a desirable place. Common sense would tell us their ‘property’ is fixed land or buildings or both. Although strictly speaking their asset could also be goods or other forms of wealth.
To avoid these confusions the law distinguishes between personal property, and the land and buildings on record at Land Registry UK. Personal property and chattels in the world of solicitors are things we can move around, while land and buildings are fixed in one place.
That delightful old building is definitely a fixed property, and has been there for quite a while. While the canal boat and white delivery van are movable, and therefore chattels belonging personally to someone. This distinction highlights several important principles that are fundamental to this discussion:
- We can sell, or gift chattels or personal property to someone else and they can move them elsewhere.
- Whereas fixed property – be it land or buildings – are always at the same location whether we own them or not.
This distinction dates from the mediaeval era in Britain, when wealthy landlords owned all the land and the buildings thereon. If peasants moved away, all they could take with them were ‘chatels’ they could carry, and their livestock including their cattle.
Two Types of Personal Chattels to Remember
In our modern society we own many more personal chattels than livestock, cooking pots, and the clothes we wear. Modern law therefore distinguishes between two types of personal property and chattels for purposes of probate and inheritance tax:
- Tangible chattels that we can touch and potentially move around, because they are not permanently attached to land and / or improvements thereon. We may hold some form of title on these, but they include all of our physical possessions at the time of our death.
- Intangible property that we cannot touch, feel or move, although it represents real value. Our ownership over this is usually documented in the form of certificates, bank deposits, copyrights, trade names, licenses and other forms of intellectual title.
That coat of arms belonged to Queen Elizabeth 1 of England, and represented her power from 1558 through to 1603. It embodied her awesome power her subjects could sense through her actions, although the essence of her influence was not something they could touch and see.
Real Property Versus Personal Possessions
When Queen Elizabeth 1 passed away, her personal power died with her, although her palaces, castles and feudal lands lived on. Her real, fixed property, and the improvements on it retained their value, because their worth depreciated slowly, if at all.
Pretty much the same is true of fixed property and improvements in deceased estates. Their value is intrinsic and can be accurately assessed through a formal RICS property valuation. However by contrast, the true worth of our personal possessions is often clouded over by our personal opinions.
What Is The Real Value of This? ©Avery Associates
The value of personal possessions compared to real property can fluctuate rapidly as social values shift. An 18th century oil painting by a minor artist may have historic value, but its true worth is what a willing collector will be prepared to pay. This distinction may be irrelevant to the owner while they are alive, but upon their death it assumes new relevance.
Personal Property / Chattels in Deceased Estates
When a person dies two vested interests surface, and require their executor’s attention:
- His Majesty’s Revenue Collection wants to collect inheritance tax.
- Legitimate heirs demand their share of the remaining estate value.
The worth of the estate depends on the true value of its chattels and property, as opposed to what the two interested parties may hope. The executor finds themselves caught in the middle, often with little or no experience of such matters.
Speak to Avery Associates for Advice
Avery Associates has been helping assess value of real fixed property, and movable personal chattels in London and surrounds for decades. We are well connected with leading auction houses, and regularly assist executors with inheritance tax submissions.
Our contact details are as follows in case you would like to explore this further:
Avery Associates, 291 Mitcham Road, Tooting, London SW179JQ
Freephone: 0800 567 7769, Head Office: 0208 640 00 44
Email: info@averyassociates.co.uk
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