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
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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
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
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

USA - Artwork and Estate Tax
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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.
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Articles by Art Business Advisers

Professional advisers
Professional journals and newspapers
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