Art law

Art law—introduction for Private Client practitioners

For Private Client practitioners, it is increasingly common to be asked to advise on clients’ artworks in the context of estate planning, trust administration or other issues. Art may include everything from paintings and sculptures to street art, classic cars, yachts, luxury collectables, wine, musical instruments and also, increasingly, digital assets.

Art law is a specialist area, but also wide ranging across various legal disciplines. Legal issues may arise in the context of transactions or disputes involving artwork as well as wealth and tax planning. There are intellectual property rights to consider, as well as import and export duties and taxation and compliance in relation to the sale or transfer of artwork.

For general information on the issues which may arise when buying and selling art, disputes over the ownership and provenance of artwork and wealth and tax planning issues, see Practice Note: Art law—introduction for Private Client practitioners.

Art law—bailment

A bailment can arise in common law when one party takes temporary possession of another party’s goods:

  1. a collector, known as the bailor, gives an artwork or chattel to another

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All in? Court confirms when a settlement is 'made' for the purposes of excluded property (Accuro Trust (Switzerland) SA v The Commissioners for HMRC)

Private Client analysis: This case considered the meaning of 'relevant property' under the settlements regime of the Inheritance Tax Act 1984 (IHTA 1984) and, in particular, the time at which this definition is to be tested. The question arose as to whether the trustees of an offshore trust established by a non-UK domiciled settlor were subject to the UK settlements regime in respect of property added to the trust after the settlor became deemed domiciled in the UK, or whether they were exempt from such charges as the trust consisted solely of excluded property. The First-tier Tribunal (FTT) held that whether trust property is excluded property is based on the status of the trust at the time that it was established, not at the time that the property in question was added to the settlement. As a result, the trust in this case did consist solely of excluded property and no inheritance tax (IHT) charges arose as a result of either the ten-year anniversary or capital distributions. The FTT was also asked to consider whether their jurisdiction was appellate, or supervisory only. The FTT held that, while their jurisdiction was supervisory, the questions raised by the trustees were relevant in establishing whether HMRC had acted reasonably and that the outcome (ie that the paid IHT should be refunded and that no further IHT was due) would be the same in either case. Written by Katherine Willmott, senior associate solicitor at Foot Anstey LLP.

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