Art

Guest Comment: A Boost For The UK Art Market?

Wendy Spires, Group Deputy Editor, London, 25 June 2012

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Fiona Graham, a partner in the private client and tax team at Boodle Hatfield, discusses the complexities of the tax treatment of artworks held by resident non-domiciliaries.

Fiona Graham, a partner in the private client and tax team at Boodle Hatfield, discusses the complexities of the tax treatment of artworks held by resident non-domiciliaries.

The government appears to have a love-hate relationship with wealthy individuals and their families living in the UK, but resident elsewhere – resident non-domiciliaries, or the so-called non-doms.  The UK enjoys the wealth they bring and inject into the economy, but struggles with how such individuals should be taxed.

Nowhere is this more apparent than when it involves works of art held by resident non-domiciliaries (RNDs).  The rules on purchasing and selling and bringing works of art in and out of country for repair, sale or display are complex.

It is perfectly understandable that once an individual has a house in the UK they will want to decorate and furnish it.  Some furnishings may be quite valuable, and it is here that a number of issues arise.

If a chattel is brought to the UK to be enjoyed by that individual and purchased out of untaxed income a taxable remittance will arise.  The remittance is based upon the purchase price of the asset, and not its market value.

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