To ensure you are prepared for the winning bid at an art auction read our summary of the steps you should take and factors to consider.
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Category: Business Advice
New graffiti art in Lowestoft vandalised after Banksy confirms authorship
Detectives are searching for a vandal who painted over a new Banksy artwork with white paint. Since it first appeared in Lowestoft one week ago, Banksy has confirmed the mural and ten others along the coast of East Anglia as works by his own hand.
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UK art dealers told to toughen up in fight against money laundering
The UK’s National Crime Agency (NCA) has issued UK art galleries with an “amber alert” following concerns that potentially hundreds of millions of pounds are being laundered through art sales.
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UK Budget 2021: Additional £408 million in funding given to UK arts sector
Chancellor Rishi Sunak has announced £408 million in additional funding for museums, theatres and galleries in England to boost their recovery once coronavirus restrictions ease this summer. The budget statement, released on 3 March 2021, comes after the chancellor committed the government to doing “whatever it takes to support the British people and businesses through this moment of crisis“.
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UK decides not to participate in EU’s controversial cultural property regulations
Only a few days after finalising Brexit, the UK has announced it will not adhere to the EU’s strict regulations on importing cultural property. This comes after four years of negotiation over the approval of the ‘Trade and Cooperation Agreement’, a 2,000-page document that outlines the legal cooperation between the EU and the UK.
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Creative industries shocked by UK withdrawal from £1.3 billion EU arts fund
Last week the UK’s withdrawal from the European-Union-funded ‘Creative Europe’ scheme sparked outrage amongst the creative industries, declaring that the decision “threatens an impoverished future for British creativity“. Continue reading
Law Commission calls for reform to art finance law
On Monday 19 September 2016, Boodle Hatfield LLP was delighted to host a seminar presenting the Law Commission’s recommendations on reforming the law of loans secured on personal goods.
The Law Commission highlighted the Bills of Sale Act 1878 and the Bills of Sale Amendment Act 1882 as being archaic Victorian statutes which are wholly unsuited for modern credit arrangements. The calls for reform have stemmed from the logbook loan sector which uses Bills of Sales to secure loans and where sharp practices have been deemed disproportionate and unfair on borrowers. The proposed reforms will not only regulate the logbook loan market but will also have knock on effects on the more exclusive art and luxury asset lending sector. Continue reading
Why English Heritage were liable for a visitor’s injuries and how similar institutions can minimise their risks
Earlier this year, The Court of Appeal upheld the ruling that English Heritage were fifty per cent liable for injuries that a member of the public, Mr Taylor, suffered whilst visiting Carisbrooke Castle on the Isle of Wight, as they failed ‘…to warn visitors by means of a sign of the danger which gave rise to the accident‘ (read the judgment here). But what does this mean for similar organisations and how can the risk of liability be managed?
First, a bit about the case. Mr Taylor visited the Castle grounds in 2011 with his family; they took ‘Bastion Walk’, which lead to an elevated firing platform. Mr Taylor left to take better photographs via a steep slope to an informal grass pathway which follows around the top of the outer bastion wall, which unbeknown to him led to a twelve foot drop into a dry moat. He was found by his family minutes later lying in the dry moat. Continue reading
Auction house guarantees: Friend or foe?
Auction house and third party guarantees are a hot topic at the moment, with Bloomberg reporting that, for the 2015 New York autumn sales, $1 billion – approximately half – of the $2 billion total value of lots were already sold before the “paddles are even raised” (Bloomberg, 29 October 2015). On 9 September 2015, Sotheby’s filed a Form 8-K with the US Securities and Exchange Commission confirming that they had entered into an arrangement with the Estate of A. Alfred Taubman, their former chairman, to sell art from his collection, which was estimated to be worth in excess of $500 million. The arrangement provided that “Sotheby’s agreed to provide an auction guarantee for the collection at approximately that level”. Continue reading
Brexit: what now for the arts?
The country has decided to leave the EU. What might this mean for the arts? The Government is obviously going to have hugely competing priorities, but it is important that the art market now comes together to ensure their voice is heard.
The immediate economic aftermath will clearly have a significant impact on all aspects of the art market for some time, including on the current auction sales, as well as consignments to future sales in the next few months.
Our art law specialists consider the possible longer term impact of the result on the art market, in terms of museum and arts funding, the future of the Artist’s Resale Rights, possible changes to export licenses, and to import VAT. There is significant potential to achieve meaningful reform to maintain and enhance the UK’s competitive advantage in the art market.
Funding
Becky Shaw, a solicitor from Boodle Hatfield’s art law team, said: “EU funding for the arts runs into millions of pounds a year, and has contributed to many important projects. Whilst the UK government will continue to support the arts, it is not unreasonable to expect a complete reassessment of how the arts in the UK are to be funded in the longer term.”
Artist’s Resale Rights
Artist’s Resale Rights (ARR) may now come under the spotlight. Supporters of ARR describe it as the most significant new right for visual artists in recent times, giving artists an ongoing stake in the value of their work. Its critics argue, however, that ARR puts London at a disadvantage to its competitors – such as New York and Hong Kong – that do not levy ARR on sales.
Tim Maxwell, a partner at Boodle Hatfield, said: “It would not surprise me if those in the art trade now push for a renegotiation of ARR to better compete with New York and Hong Kong. Artists themselves are likely to oppose changes to ARR that could see their royalties reduced.”
Export licenses
The current export license regime was introduced in 1993 by an EU regulation, replacing the UK’s previous licensing regime, and many important artworks and artefacts have been ‘saved for the nation’ through the export licensing system.
“Critics have long seen the regime as an unwelcome administrative burden and additional cost,” says Becky. “They also point to the fact that the rules vary greatly in different EU countries causing difficulties for galleries and buyers. This may be an opportunity for reform.”
VAT import duty
Tim says: “VAT import duty can be a headache for many UK art dealers, galleries and auction houses. Works imported to the UK from outside the EU are liable to a 5% import VAT charge, whereas works imported from the EU are exempt from import VAT. Calls to abolish import VAT altogether may now become louder in an attempt to encourage more of the international market to move to London particularly from other EU countries.”
Art Law & More 