“The recent sale of a Picasso at auction for a record $106m highlights the value of art. While very few of us will have a Picasso lying around, it is important to understand the tax relief that could be available if you own or inherit a valuable piece of art.
“If a person receives a valuable piece of art but is faced with having to settle a large tax bill because of it there are options available. The owner can come to an arrangement whereby either the item is offered to a museum, archive or library to exhibit, or that the public can access it at the owner’s property. That way the individual retains ownership of the item and there will be no tax charged on the change of ownership.
“Art can live on long after the death of the artist, as is apparent in this Picasso case and the death of an artist often sparks a demand for their art – be it music, paintings or novels. Artists need to adequately plan for what will happen to their work, or indeed royalties, their work receives in the after their death.
“Estates which potentially involve the payment of royalties can be complicated and appointing executors to deal specifically with the artist’s work will assist in ensuring that wishes are followed correctly. It may be that royalties are paid into a trust for future generations of the artist’s family. Alternatively, they could be donated to a charity or used for an artistic event. There are many possibilities and it is essential that legal advice is taken on this specialised area.”