Art Business Info. for Artists
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Art and Inheritance / Estate Tax

When tax planning, it's very important to get professional advice
The links below are to websites which can help you to understand better
what are the relevant issues and help you work out the questions you need answers to.


The section is split between the UK and the USA.
The tax paid on the transfer of the estate of a deceased person is called:
  • Inheritance Tax in the UK and
  • Estate Tax in the USA
The key issues in tax planning revolve around the purpose of holding on to an art collection during a lifetime and the extent to which art can and should be gifted to ultimate beneficiaries before and after death.
  • Is it intended as a legacy? In which case who will get it on death?
  • Is an art collection principally being held as investment (rather than for personal enjoyment)? What principles and rules should apply to how it should be acquired and sold before and after death?
  • Is there a philanthropic goal e.g. is it intended it should be left to the nation?

UK - Artwork and Inheritance Tax
​

Links to sites which help to understand the scope for how artwork can be treated as and when Inheritance Tax arises following the death of an artist or art collector
Articles relating to official bodies e.g. HM Revenue & Customs and the Arts Council

HM Revenue & Customs
  • HM Revenue & Customs: Introduction to Inheritance Tax planning
    Planning ahead for when you die allows you to set out clearly who should get what from your estate. Also, you can maximise Inheritance Tax reliefs and exemptions if your estate might be worth more than the Inheritance Tax threshold. 
  • Appendix 1: letting people donate items of cultural and historical importance to the state in return for tax reductions (Acceptance in Lieu Scheme) | Gov.UK - This is part of a copy of a document that stated a policy of the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Arts Council
  • Acceptance in Lieu | Arts Council - The Acceptance in Lieu (AIL) scheme enables taxpayers to transfer important works of art and other heritage objects into public ownership while paying Inheritance Tax, or one of its earlier forms. 
  • Items for allocation | Arts Council - Once an object has been accepted in lieu, it is allocated by the appropriate minister to a suitable museum or gallery.
  • Private treaty sales | Arts Council - Items which have been granted conditional exemption from capital taxation (Inheritance Tax ("IHT") or Capital Gains Tax ("CGT")) can be purchased by private treaty by a body listed in Schedule 3 of the Inheritance Tax Act 1984 

The Art Fund
  • Tax-effective Ways to Help - Support the Art Fund - The Art Fund - Sell a work of art to a museum tax-effectively (Private Treaty Sale)If you sell a work of art, you may be liable to Capital Gains Tax (CGT) and/or Inheritance Tax (IHT). However, these charges may be waived if you sell to certain museums and galleries
Articles - providing comment or advice from professionals
  • Tax Planning for Art Collectors - Download a very helpful pdf file outlining key issues This Know How Bulletin deals with tax efficient planning for art collectors. It looks at the wider economic and family ramifications of holding art before considering the UK taxation consequences. 
  • How to pay your taxes with Art | NoMoreTax - advice from a firm of Belgian lawyers who like "Creating creative but legal tax advice"
Articles - comment by newspapers
  • The Independent | Inheritance tax becomes largest source of art for the nation - Major artworks by Picasso, J M W Turner and Barbara Hepworth are among more than 25m worth of paintings, sculptures, manuscripts, porcelain and other artefacts donated to the nation over the past year in lieu of inheritance tax.
  • Winston Churchill paintings accepted for nation in lieu of tax | The Guardian (March 2015) - An important collection of paintings by Winston Churchill has been accepted for the nation in lieu of inheritance tax on the death of his daughter. Mary Soames. They will mostly hang at his family home at Chartwell. 

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USA - Artwork and Estate Tax
​

The estate tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of deat (IRS)
What's relevant in the USA is not always applicable within the context of the law of another country.
​

Articles by Art Business Advisers

Professional advisers
  • United States: Valuing Artwork For Federal Taxation Purposes: Income, Estate & Gift Tax Issues | Art & Advovacy, Spring 2014, Volume 17 - the tax rules often motivate owners to overvalue or undervalue property, including artwork
  • Acquiring, Holding and Transferring Art | BNY Mellon Wealth Management - A look at the unique tax and gifting rules associated with artwork

Professional journals and newspapers
  • Valuing Art for Tax Purposes | Journal of Accountancy - Beauty may be in the eye of the beholder, but art valuation requires reason and objectivity.
  • Art and death taxes: Not So Certain | Investment News - Unique pieces and changing market values complicate Tax Court determinations
Artbusiness.com
  • Income Tax, Gift, and Estate Issues for Artists | Artbusiness.com
    Q: Please talk about the artist and estate taxes, gift tax, donations, and other IRS tax liabilities and implications for art and artists. What can an artist do who will be leaving a large inventory of paintings at the time of his or her death?
  • Art & Artist Estate Planning
    The typical working artist produces hundreds of works of art during the course of his or her career; some produce many more. As with other human beings, the chances of an artist becoming deceased increase with age. In the unlikely event of your demis
  • Artists: Planning Your Art Estate
    Q: I'm deciding what to do with my possessions in the unlikely event of my demise and am wondering who should manage or oversee the sale of my art. 
Art Law: The Guide for Collectors, Investors, Dealers & Artists 4th Edition
by Judith Bressler and Ralph Lerner

This book is:
  • very large and NOT cheap
  • widely regarded as the standard or cornerstone text "the industry bible" for legal matters relating to the visual arts
  • accessible to somebody who is not a lawyer
  • full of timesaving forms, checklists, charts, and procedural guides

NOTE:
​This book is really only relevant to the law in the USA
It includes a hefty section about Tax and Estate Planning for both art collectors (ch. 15) and artists (ch. 16).

This considers:
  • charitable contributions
  • drafting of wills
  • transfer of art between generations
  • pitfalls to avoid
  • generally all matters relating to legal aspects of estate planning
It also discusses the IRS perspective and regulations on:
  • art valuations for tax purposes
  • gifts to family members and available gift tax exemptions
Hardcover: 1774 pages
Publisher: Practising Law Institute (PLI);
4th edition (January 16, 2013)
Rated an average of 5 out of 5 stars by 5 customer reviews

BUY THIS BOOK

Art Law: The Guide for Collectors, Investors, Dealers & Artists - buy on Amazon.com

Return to THE ART LEGACY

Go To:
  • Estate Planning for Artists
  • Famous Artists Estates
  • Artwork Inventory
  • After the Death of an Artist
  • Copyright and Resale Rights for Heirs
  • Estate Planning for Art Collectors
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ABOUT ART BUSINESS INFO. FOR ARTISTS
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It helps artists learn how to do better at being business-like, marketing and selling their art and looking after their financial security.
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PLEASE NOTE:
1) Content and the law change all the time. It's impossible to keep up with it if you're not working on the topic full time. 
​2) I research topics carefully. However, I am totally unable to warrant that 
ANY and/or ALL information is 
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  • Home
    • Art Business Information Index
  • NEWS
  • PRACTICE
    • Starting Out - Tips
    • Being a Professional artist >
      • Working Lives of Professional Artists
      • Artists' Side Hustles
      • Artists' Residencies
      • Artists Unions
    • Best Art Business Books
    • Learning Opportunities >
      • Art Schools in the UK
      • Art Business Courses
    • Image Management for Artists >
      • How to photograph art
      • How To Scan Artwork
      • How to back up image files
    • Law for Artists >
      • Legal Matters
      • Data Protection for Art and Artists
      • Brexit Guidance for Art and Artists
    • Business Management for Artists >
      • Risk Management for Artists
      • How to spot Art Scams / Fraud
      • Life in an Art Market Recession
      • Coronavirus COVID-19 and Art
  • MARKETING
    • How to write an Artist's Statement >
      • What is an Artist Statement?
      • Why you need an Artist's Statement
      • TIPS How to write an artist statement
      • The Language of an Artist's Statement
      • What an artist statement should contain
      • Examples of Artists Statements
    • How to write an Artist's Resume or CV >
      • Social Media summaries
      • CV for Artists
      • Resume for Artists
      • Biography for Artists
    • How to sign a painting, drawing or fine art print
    • Business Cards for Artists
    • How to write a press release for an artist
    • The Private View Invitation
    • Publicity for Juried Exhibitions
    • Websites for Artists >
      • Why websites matter
      • Options for Websites
      • Web content for Artists
      • Web design for artists
      • Keeping Google Happy
      • Writing for the Web
    • Image & Video sizes for Social Media Sites
    • How to be mobile-friendly
  • SELL ART
    • Trading Law & Regulations for Artists (UK)
    • E-commerce for artists
    • Art Exhibitions & Competitions >
      • Juried Exhibitions & Art Competitions
      • Juried Art Exhibition Checklist for Artists
      • How to cost a juried exhibition entry
      • How to make labels for an art exhibition
    • A Guide to Art Agents and Consultants
    • A Guide to Art Dealers & Galleries >
      • How to find the right gallery
    • The Artist-run Gallery
    • The Vanity Gallery
    • Art Fairs
    • Alternative Options for Exhibitions
    • How to Sell Art from Home
    • Open Studios
  • FRAME ART
    • List of Recommended Picture Framers
    • Conservation Products
    • Framing for open exhibitions and art competitions
    • Framing Videos
    • How to hang a picture
  • SHIP ART
    • How to pack artwork >
      • How to pack and ship pastel paintings
    • Packaging materials
    • How to ship art internationally >
      • Rules of Origin
      • Export Licences for Cultural Goods
    • How to ship art to exhibitions
    • How to mail art - Post & Parcel Services
    • UK & Ireland: Art Transport Services
    • USA Art Transport Services
  • COPYRIGHT
    • Copyright and artists' rights
    • BASICS: Copyright Infringement and Fair Use
    • How to protect artwork online
    • How to do a reverse image search
    • What to do about copyright infringement - for artists
    • Global Conventions on copyright >
      • Copyright in the UK
      • Copyright in the USA
      • Copyright in Canada
      • Copyright in Australia
  • MONEY & TAX
    • How to work out profit from an art sale
    • How to Price Your Art >
      • How important is price when buying art?
      • Options for Pricing Art
      • Terminology and Formulas for Pricing Art
      • Art Experts on Pricing Art
      • How artists price their art
      • The price of affordable art
    • Payments to Artists >
      • Paying Artists
      • How to create an Invoice
    • VAT for Artists
    • Tax Tips for Artists >
      • Tax on prize money
      • UK Tax Tips for Artists
      • UK: Self-Assessment Video Tips
      • USA Tax Tips for Artists
      • Ireland: Tax for Artists
      • Australia: Tax Tips for Artists
    • Insurance for Art and Artists >
      • Insurance for Art Teachers
      • UK Insurance Policies for art and artists
      • USA & Canada: Insurance Policies for Art and Artists
    • Artists' Grants & Scholarships
    • Retirement and Pensions for Artists
    • The Art Legacy >
      • Estate Planning for Artists
      • Estate Planning for Art Collectors
      • Famous Artists Estates
      • Artwork Inventory
      • After the Death of an Artist
      • Copyright and Resale Rights after Death
      • Art and Inheritance Tax
  • About + Help
    • Would you like me to help?
    • Privacy & Cookies Policy
    • Contact