The Lemon Fool

It has been pointed out to me that art is outside the scope of inheritance tax. I have been approached by a company who appear to be reputable art dealers to buy a painting by an artist said to be up and coming.

Has anyone been along this road? It is claimed that there can be income from royalties on the sale of prints from the original painting, which itself may appreciate considerably in value over the years.

TJH

tjh290633 wrote:It has been pointed out to me that art is outside the scope of inheritance tax.
TJH

Have you a link?

I always thought that 'art' was like any other asset and needed to be valued as part of the estate.
Although in practice I guess that who does the valuation may result in a possible valuation that may be less than might be realised if one were to actually sell the item.
Similar in theory to the valuation of property, e.g. the home of the deceased, may be questioned by a district valuer.

I often wonder if the 'taxman' watches Antiques Roadshow to see those valuations of family heirlooms that I suspect were undervalued for probate.

Adrian

tjh290633 wrote:It has been pointed out to me that art is outside the scope of inheritance tax. I have been approached by a company who appear to be reputable art dealers to buy a painting by an artist said to be up and coming.

Has anyone been along this road? It is claimed that there can be income from royalties on the sale of prints from the original painting, which itself may appreciate considerably in value over the years.

TJH

It is too late in the evening for me to comment sensibly but I would have thought that unless you are talking of something world class there is no chance. We have surely all read of estates handing over art in payment of IHT and as for the sale of prints? Well OK maybe so but a very limited market in most cases I would have thought. An artist said to be up and coming? Why not buy a lottery ticket?

Forget it and give away the money to your heirs!

Dod

Dod101 wrote:

tjh290633 wrote:It has been pointed out to me that art is outside the scope of inheritance tax. I have been approached by a company who appear to be reputable art dealers to buy a painting by an artist said to be up and coming.

Has anyone been along this road? It is claimed that there can be income from royalties on the sale of prints from the original painting, which itself may appreciate considerably in value over the years.

TJH

It is too late in the evening for me to comment sensibly but I would have thought that unless you are talking of something world class there is no chance. We have surely all read of estates handing over art in payment of IHT and as for the sale of prints? Well OK maybe so but a very limited market in most cases I would have thought. An artist said to be up and coming? Why not buy a lottery ticket?

Forget it and give away the money to your heirs!

Dod

i do agree, Art is a very special field and u need to be an expert or know a good one if u want to invest in such things!

tjh290633 wrote:It has been pointed out to me that art is outside the scope of inheritance tax. I have been approached by a company who appear to be reputable art dealers to buy a painting by an artist said to be up and coming.

Has anyone been along this road? It is claimed that there can be income from royalties on the sale of prints from the original painting, which itself may appreciate considerably in value over the years.

TJH

It sounds like a scam to me.

Firstly, artworks are not IHT exempt.

Secondly, art dealers mark up is huge - you would be lucky to get 50% of what they charge if you sold it back to them. As an example look at dealer and Ebay prices for someone 'up and coming' like Darren Baker - the 'sold' prices are usually a fraction of the 'valued at'.

The real money seems to be when the atist dies. Lobert Lenkiewicz' stuff was virtually given away at the auction at Westpoint after his death, stuff was in local dealers at double the sale price within days. Stuff by Carl Payne has shot up somewhat this year - we saw a sculpture in a local shop nearly double the price it was a couple of years ago before he died.

Thirdly owning an original does not guarantee you royalties from prints. That is 'copyright' ownership and is a seperate negotiation. There was a proposal where Copyright owners can also benefit from a percentage of any subsequent commercial reselling of the painting, not sure if that came to anything.

We own several orignals bought via dealers, at auction, and directly from the artist. We bought them because we liked them, apaprt from one, which we thought might be an investment. We have seen prints of some of out paintings for sale for 60%+ of what we paid for the original, so probably a good buy. The 'investment' one is probably the only one we would still have to sell at a loss.

Paul

Too late to EDIT - but if the artwork is deemed an artwork of "Heritage", then IHT can be deferred on it, but it is still due if the beneficiary sells it.
https://www.gov.uk/guidance/tax-relief- ... age-assets

Paul

Thanks for those comments which are very useful.

TJH

Do you have a bargepole? Use it to avoid touching this scam.

DrFfybes wrote:Too late to EDIT - but if the artwork is deemed an artwork of "Heritage", then IHT can be deferred on it, but it is still due if the beneficiary sells it.
https://www.gov.uk/guidance/tax-relief- ... age-assets

Paul

Thanks, I think that clinches the argument.

CliffEdge wrote:Do you have a bargepole? Use it to avoid touching this scam.

It will be deployed.

TJH

Not specifically related to this case, but wouldn't the bargepole be deployed by default with these types of approaches, when considering that the cold-caller has three clear priorities, and that the person picking up the phone is, sadly, right at the very end of them -

Cold-caller priorities -

• Themselves, in terms of potential commission

• The original seller, in terms of selling his wares

• The gullible victim providing the precious cash...

Politely say you're not interested and hang up the phone would always be my approach...

Cheers,

Itsallaguess

Itsallaguess wrote:Politely say you're not interested and hang up the phone would always be my approach...
Cheers,
Itsallaguess

Polite to a scammer
not me....
they do not deserve it
I was polite to one and he kept calling back
When I said he was an f'ing con artist it stopped

They've come to you? The spidey-senses should be tingling.

You are being asked to invest in an area you know little about simply for IHT issues....

p.s. now if you said it was about investing in bridges....

tjh290633 wrote:I have been approached by a company who appear to be reputable art dealers to buy a painting by an artist said to be up and coming.

"I have been approached..." is what should turn you off from the start! But I am curious, who is the company and who is the artist?

I'm certainly no expert in investing in art, but I do have a familiarity with art itself, both old and contemporary, and regularly go the viewings at the "big four" auction houses (Christies, Sothebys, Bonhams & Phillips), so I am curious as to who this up and coming artist is....

You could do worse than getting to know sites like this:

https://www.the-saleroom.com/en-gb

They link to online auctions and you can learn quite a lot from seeing how much some of the items go for. The commission you pay can sometimes be eye-watering, not to mention postage. But it's very educational and quite entertaining.


Steve

mc2fool wrote: I am curious as to who this up and coming artist is....

Michael Basura

TJH

https://www.marks-art.uk/abstract-art
far be it from me to say looks like the work of a five year old
What a philistine I am

If I were buying art, it would have to be something that I liked and I cannot see anything in this artists work that would interest me. Besides, we are only talking about £7,000 per canvas or so, so not much help (even if it were to be IHT free, which it would not be) in ameliorating IHT.

The best way to help with IHT is to give away assets and then endeavour to live for a further 7 years.

Dod

I'm going to give an opposing view that investing in art (and valuables) is a way of avoiding IHT.

An estate will typically put a notional value on contents ie £500, not actually list the goods.

HMRC can check your IHT return through their computer program, which will include records of bank accounts, investments and via the land registry. They'll have a detailed picture of our savings and investments from our tax returns if you qualify for them, and home ownership from the land registry.

But they are unlikely to rock up at your old address after you/we are gone searching for ipads, electronic goods, art, jewelry, gold coins, etc. and checking their ebay value.

So potentially having some valuables at home is a way around IHT (40%).

Although of course strictly speaking your descendants would disclose such items - I doubt many do, unless very high value.

This is an excuse for a bit of " I saw you coming" .. ok, yah?

https://youtu.be/Xii3lg2yt2E