Rebecca Towey

+44 (0)1733 887678 rjtowey@greenwoodsgrm.co.uk

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Pablo Picasso’s Paintings

Wealth Preservation / 07 October 2021

It was recently reported that Pablo Picasso’s daughter settled her father’s inheritance tax liability by donating some of his works to the Picasso Museum in Paris.  A ceremony was held where six paintings, two sculptures and a sketchbook were passed to the museum with the intention that they will be presented to the public in 2022.

It has always been possible to settle inheritance tax liabilities in this way, but the magnitude of this donation is rare.  Although the liability was to be paid to the French government on this occasion, there are rules in place in the UK regarding inheritance tax on assets that are considered to contribute to the nation’s society, knowledge or culture.  These are known as national heritage assets. there is a similar provision available in the UK.

In the UK, specific buildings, land or other objects can be exempt from inheritance tax when they pass to a new owner following a death.  There are certain qualifying conditions that must be met such as buildings being of historical interest, land being of outstanding natural beauty or objects having national scientific, historic or artistic interest.

In addition, the new owner must agree to look after the asset, keep it in the UK and make it available for public viewing.  If these conditions are met, the asset will not attract an inheritance tax liability as it will be treated as exempt. However, if the conditions are not met or there is no agreement by the new owner, inheritance tax will be payable.

It seems that there are also similar rules in other countries all over the world.  In April 2021, the family of the late Samsung Electronics chairman donating around 23,000 pieces of artwork to South Korean museums.  The artworks had been owned by the late chairman and making the donation enabled the family to save a considerable amount in inheritance tax.

The various rules regarding these assets allow family members to mitigate inheritance tax or settle any liability in a different way.  The rules also enable the general public to be able to enjoy various assets that may not have come to light had such tax rules not been in place.

 

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This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. This update relates to the prevailing circumstances at the date of its original publication and may not have been updated to reflect subsequent developments. If you have general queries about our updates, please email: mailinglists@greenwoodsgrm.co.uk

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