He was considered an ‘up-and-comer’ in the international art market and previously worked at London’s White Cube gallery. On Thursday 11 June 2020, the rise of 33-year-old art dealer, Inigo Philbrick, came to a crashing halt when he was arrested by the FBI.
With the tolling of the Brexit bell on 31 January, commentators are revisiting the long-standing question of what a post-Brexit art market will look like.
This week it was confirmed that the UK art market had recovered in 2018, reclaiming its second position in the global league tables. Continue reading
A forgery scandal on the scale of the Old Master fakes and Knoedler Gallery debacles has broken in the United States. Up to as many as 700 fake Jackson Pollock paintings may be circulating the art market according to a report by the International Foundation for Art Research (IFAR).
The Foundation has identified four fake Pollocks since 2013. Continue reading
I read your piece on the EU with some interest as I raised the issue of import VAT with the Society of London Art Dealers a few months ago.
The present system means that anything we bring in from the EU is exempt from import VAT, while anything imported from outside the EU is liable to the 5% import VAT. Because it is a burden to pay out for works of art a dealer may have to keep in stock for years and only recover on export within a certain period, these works are kept either in bond, or on Temporary Import (TI). If in TI there is quite a burden of paper work and a limit on how long it can remain on TI and a financial upper limit on the total that a dealer can have on TI at any one time. One can deal with this with a small number of works but our gallery, for example, has imported about 90% of its inventory from the EU and it would be an almost impossible bureaucratic and financial burden to have to either pay the import VAT or hold the majority of our inventory on bond or TI. If the work in question is consigned on a commission basis to a UK dealer, then import VAT is likely to be significant proportion of whatever the dealer to whom the work is consigned might expect to earn from the sale – as the VAT is due upon import, this may make consignment sales unaffordable.
If the present import VAT regime is maintained for works of art, the entire trade in non-British art in the UK would have to seriously consider exiting the country – while the major auctioneers would be likely to relocate sales of works of art from the EU either in the country of origin or in the US. At present there is an indication in an auction catalogue where a work has been imported and VAT is due; this is generally considered a negative for buyers. If everything brought in from the EU has to be on TI this would be a very substantial burden on the auction houses.
The government should instead consider whether the present administratively burdensome system of import VAT on works of art produces sufficient revenue to justify maintaining it if the UK leaves the EU. The result of maintaining import VAT may be to drive the market out of the UK with a net loss of revenue; on the other hand, if it is abolished, the UK art market would benefit enormously as even more of the international market would move here. Many EU art dealers sell to clients outside the EU and if there is no UK import VAT there would be a direct incentive to relocate their businesses in the UK. In the US, auctioneers and dealers must charge sales tax to in-state buyers and, when they have representative offices in other states, to buyers resident in those states as well. When purchasing a work of art at a US auction that is intended for export, the process of reclaiming or not paying sales tax – particularly for private buyers as opposed to dealers who may have out of state resale numbers – is another administrative burden that could be avoided entirely if the sale was made in the UK. There is no US federal import tax on works of art and US buyers importing works of art are supposed to declare State “Use Tax” but in practice this has been hard to enforce.
EU exit coupled with the abolition of import VAT on art could have a considerable net positive effect on the London market. This is not only because of growth in the London art market but because of associated spending on hotels, restaurants, and with other retailers. Furthermore the US regulations on the sale on works of art containing ivory, tortoiseshell, certain woods, feathers, etc, have made whole categories of art unsalable in the US – even netsuke, where much of it is made from 50,000 year old Mammoth ivory excavated in Siberia, is subject to this ban as are medieval ivories whose provenance has been known for centuries. Some states have banned all trade even for artworks that have been in the US for decades or more and are hundreds of years old. New York State now bans any trade where more than 20% is made from some material that is taken from an animal, plant or tree on the protected list, irrespective of its age. This trade could and probably will move to London, especially if import VAT is abolished.
BREXIT would also affect the regime that deals with the export of art works. No two European countries have identical regulations on the export of works of art. While all works leaving the EU over a certain value (depending on the category, and in some countries irrespective of the value) require an export license, these licenses depend on whether the work of art has been given, or qualifies for, a certificate or attestation of free circulation. Some EU countries have categorised works of art as unexportable (thereby depriving the owners of much of the value) or have imposed restrictions which give the state the right to hold up the export until the funds can be raised to purchase it. While a total ban on export might be necessary in the developing world where there are very limited resources for the maintenance of the archaeological or artistic heritage, the imposition of such absolute bans by European states is actually a disincentive to collect and bring works back that have been sold before these bans were imposed. This system is not only poorly devised and managed but it has recently become clear that some countries may not even consider such certificates as binding and may attempt to revoke them later if the officials charged with issuing such certificates make an error. A further complication for British based dealers under the present rules is that the sterling value at which export rules apply varies as the exchange rate between the pound and the euro fluctuates. Although BREXIT will mean that works imported into the UK will have had to have had a definitive EU export license, this may in practice be an improvement as only UK law, rather than both UK and EU law will apply.
As for museum funding this is a real red-herring. The decisions on the funding of British arts institutions should surely be made by the democratically-elected UK government, rather than in Brussels. The EU arts subsidies are a small proportion of total arts funding and even smaller as an amount of the net savings on the EU budget. The real point about arts funding is that it needs a complete reassessment of how it is to be done in the future, rather than whether UK arts institutions should have to continue to go cap in hand to Brussels.
Guy Sainty, of Stair Sainty Gallery
The figures collected by the European Fine Art Foundation (TEFAF) in its annual Art Market Report for the year 2015 demonstrate a decline in both the volume and value of sales. Sales decreased to US$63.8 billion (£45 billion) compared to US$68.2 billion (£48 billion) in 2014 while transactions fell by 2%. Continue reading
The latest reports to emerge from the leading art market research company ArtTactic and Hiscox art insurers suggests that the online art retail market has a healthy future. Continue reading
Sotheby’s has announced that Tad Smith has been appointed as President and CEO, replacing William Ruprecht who resigned in November. Smith, who is 49, was formerly president and CEO of the Madison Square Garden Company. Chosen on the strength of his experience with brands and brand strategy rather than with auction houses, he told the media that he plans to implement a five-year plan for the company, which will include an accelerated adoption of new technologies. Continue reading