Estate Planning and Tax Advice for Artists

Artists face unique estate planning challenges and opportunities:

• defining a legacy;
• protecting one's reputation post-death;
• creating an inventory or catalogue raisonné and establishing a fixed authentication procedure;
• making practical arrangements for maintenance, storage and insurance;
• creating corporate or trust structures to hold artworks for the future;
• managing future income streams from copyright and resale rights; and
• addressing the personal and emotional implications of what should happen to artworks after death and how best to provide for heirs.

We have extensive experience in providing clear and bespoke advice in this area. We also work with artist's estates, collectors, dealers, and businesses and charitable trusts with art-related interests.

Wills and Lasting Powers of Attorney

Wills and memoranda of wishes are the most effective way for an artist to define who should inherit their assets, how and when these should be distributed, and what provisions should be made for their management and preservation. Preparing a Will allows these questions to be addressed ahead of time, giving peace of mind that heirs will be fairly provided for and reducing the likelihood of difficulties or disputes after one's death.

We can also prepare Lasting Powers of Attorney to provide reassurance that an artist's assets will be managed in accordance with their wishes should they lose mental capacity during their lifetime. Lasting Powers of Attorney can include bespoke provisions relating to the sale, exhibition or donation of artworks.

Inheritance Tax

Taxation of artists' estates, both during lifetime and upon death, is a complex area with specific planning opportunities.

Inheritance tax, charged at 40% on the value of an estate, will apply to all artworks within the UK and may extend to an artist's worldwide estate, and we advise on domicile and related Inheritance Tax implications. We have specific expertise in the Acceptance in Lieu regime, whereby works of national importance may be accepted by the authorities in part or full settlement of an Inheritance Tax liability.

Lifetime planning and taxation

We work with clients to arrange charitable donations and private gifts, loans to individuals and public institutions, and the establishment and administration of corporate or charitable structures for the management and display of artworks.

In addition, we advise on the Cultural Gifts Scheme, which provides tax incentives in return for donations to public institutions. We can also provide advice on corporate taxes where art is held within a company, and the potential VAT implications of lifetime donations by professional artists.

For more information please contact Suzanne Marriott +44 (0)20 7203 5267 or Louise Paterson  +44 (0)20 7438 2202.