The hearings before the Special Commissioners of Income Tax were set to run in London from June 15-26.
The case centred on the purchase of St Cecilia for a record £6m at Christie’s in June 2000. As the picture was bought by the Foundation using a donation from the composer, part of the cost of the picture (close to £1m) was funded through the “gift aid” scheme, which allows charities to claim tax relief on donations.
Since then, Lord Lloyd Webber's foundation has regularly loaned St Cecilia for public display – it is currently part of the travelling exhibition J.W. Waterhouse, The Modern Pre-Raphaelite that begins at the RA in July – but the picture has also been leased by the composer to hang privately.
When first questioned, the unusual arrangement was cleared by the Charity Commission.
The composer has each time paid rent on the loan of the Waterhouse to ensure that he was not benefiting from the picture. However, HM Revenue and Customs claim that the £35 a day charge (set by auction houses Christie’s and Sotheby’s) is not enough.
Gift aid rules state that “if any donor… benefits significantly from their donation, then their donations will not qualify for gift aid”.
The holdings of the Andrew Lloyd Webber Art Foundation, established in 1992, also include Canaletto’s The Old Horse Guards From St James's Park, Stanley Spencer’s The Garage and Picasso’s Blue period portrait The Absinthe Drinker.
