If you have an art collection, you will no doubt be aware that it is a valuable asset. However, you may be unsure of the best way to leave this behind after you pass away. Collecting art is, for many people, a lifetime passion, and so it is important that it is left in the right hands. Unfortunately, many people fail to consider their art collection when making a Will, or are unaware that there are several ways to leave cultural assets behind. In this article, we look at leaving gifts of art in your Will, the Cultural Gifts Scheme, and how cultural assets might be valued after you pass away.
Leaving a gift of art in your Will
If you plan to leave gifts of art in your Will, you will firstly need to get your collection in order. You should gather all relevant documents to prove ownership, as well as to photograph, appraise and catalogue your collection. You should also discuss your plans with your loved ones. Perhaps certain family members will be interested in specific pieces of art, or they may have no interest in the artwork and would prefer to sell it. It can be difficult to have these conversations, particularly when you have a sentimental connection to your art collection, so be prepared to ask and answer some challenging questions.
After you have organised your collection and discussed the matter with your potential beneficiaries, you can set out to whom you wish to leave the entire collection or individual pieces of art. It is highly advisable to do this with a solicitor. You also have the option to leave the value of the collection to certain beneficiaries, which means when you pass away, the collection will be sold, and the proceeds will pass to your chosen beneficiaries. You could also leave the collection to a trust (either an existing trust or a new trust established in your Will).
What is the Cultural Gifts Scheme?
The Cultural Gifts Scheme allows you to gift items of exceptional cultural benefit to the public or the nation, and in return, receive a tax benefit. The scheme applies to works of art where the piece, or the collection as a whole, is pre-eminent for its national, scientific, historic or artistic interest. You must make an application to the scheme, and acceptance is determined by a panel of suitable specialists (not HMRC).
How are cultural assets valued?
Valuing art can be challenging, so you may wish to appoint an executor with at least a basic understanding of the art world. Your executor will also need to work with specialists to ensure proper valuation of the pieces in your art collection. Pieces of art will be valued for inheritance tax purposes as the price that the piece could reasonably be expected to fetch on the open market at the date of death.
Specialist Estate Planning Lawyers, Edinburgh
Murray Beith Murray Partner, Andrew Paterson, is a specialist in estate planning and asset protection. If you would like to discuss any of the issues covered in this article, or if you require assistance with any other matter, please complete our contact form or call us on 0131 225 1200.
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