British Art Market Federation (BAMF) chairman Anthony Browne has joined the chorus of concern headed by the Chartered Institute of Taxation about the plans for offshore trusts.
The controversial proposals go far beyond the headline £30,000 annual flat payment announced by the Government that wealthy non-domiciles with special tax arrangements would have to pay as a contribution to the economy.
The offshore trusts are used to avoid tax on investments in assets such as property and art, but now the Treasury want to make those investments subject to Capital Gains Tax at 18 per cent.
The potential damage could be widespread, affecting the high-end property market, stocks, patronage of charity and the arts and, of course, art investment. In short, a rich non-dom collector with a portfolio of art to dispose of would be faced with the choice of selling it in the UK and paying 18 per cent in CGT or shipping it to New York and offloading it there without the tax burden.
The irony is that nom-doms could still avoid the tax by shifting their assets abroad, while the British economy, which should benefit, could well lose out as investment goes elsewhere.
BAMF believe that the risk to the art market is an unintended consequence of the measures on the Government’s part.
“We are very concerned about this as it could damage the global end of the London Art Market,” Mr Browne told ATG. “We have approached the Treasury to express our concerns and very much hope that this can be averted.”
By Ivan Macquisten
New tax threat to London art market
TREASURY plans to close tax loopholes for the wealthiest foreigners living in the UK could seriously damage the art market, it is feared.
