Just last week it was announced that a private collection of works by the well known Scottish artist, Jack Vettriano, is to be sold at auction for an estimated £1.2 million in March this year in Edinburgh.
The collector in this instance is said to be based in Scotland and this will be the most significant sale of the artist’s works for about ten years. Whether or not this collector purchased his first Vettriano on a whim, this sale will perhaps provide a substantial financial return and gives us reason to consider the less artistically dazzling but important implications when art changes hands.
Many interesting artworks and genres have continued to rise in value, in defiance of the general economic gloom, and what for most collectors may have started as an impulse, and then a hobby, has proved to be a successful investment. An artwork or collection may become an important part of a family’s wealth and also become an important, and perhaps more unusual, aspect of the family’s estate and succession planning. It may also form part of an individual or family’s philanthropic ambitions.
As part of their estate and succession planning, holders of art and collectors should consider what they want to do with their works of art, both during their lifetime and after death and importantly have regard to the motivations for the holding of a particular piece or the building of a collection. Some thoughts to consider include:-
- Is it primarily for personal enjoyment?
- Is it a legacy, and if so with what objectives?
- Has it become (partially) an investment? Was that always a driver?
- Is it to serve wider philanthropic goals/cultural projects?
- A combination of these things?
- How might these motivations change over time or from generation to generation?
Once the ultimate objectives are apparent the next stage is to ensure the right structure is in place which best reflects those aims and takes account of factors such as the tax treatment and reliefs applicable to the work or collection (including in some cases where the art is physically situated).
As noted above and a potentially important factor is that the wishes of the original collector may change over time and may differ from those who inherit the collection, so flexibility can be important. It is often wise to consider whether and when to involve the next generation in this area. While tax should never be the sole consideration, its impact can be substantial, so it can be an important influence when selecting a suitable structure and may guide the right point at which the work should move down a generation or elsewhere. The right structure might mean consideration of the collector’s will, a family trust or even charity. In the same way that flexibility can be important, in some cases the attachment of conditions can be important to ensure the future stewardship of the objects- a topic on which we have blogged before.
The law applicable to art and culture can be wide and goes beyond works of art it includes areas such as copyright and other protections for artistic works (including books, music etc), issues for charities and public bodies holding art (including employment related matters) and important points for wider heritage assets such as historic houses and gardens.
We have a team able to assist with art and culture legal issues across the diverse topics involved and across each of our offices.
On January 21, 2015