INTERESTED IN MIXED MEDIA? GEORGIANA HEAD PAINTS A PICTURE OF A CAREER COMBINING A LOVE OF TAX AND ART
I’ve often wondered if it could really be possible to combine a love of art with a career in tax.
Like many tax professionals, I ‘fell’ into a career in taxation. I had studied for a degree and masters in history of art and because my college (The Courtauld Institute) was based in the same part of Somerset House as the then Capital Taxes Office, I got a holiday job working with the tax exempt goods and chattels list or ‘V&A list’.
I had a very merry time checking public access to private art collections. From this rather tenuous base I got a graduate job at Price Waterhouse. In my couple of years with PW the closest I came to art was sitting in a board room in Embankment Place surrounded by prints by Barbara Hepworth, and researching an article on the taxation of antiques.
Business or pleasure
I determined that I would see whether the sort of job that I had dreamed of exists today. First, I wondered if my initial choice of specialism had been wrong. Maybe private client wasn’t the place to start? Maybe indirect tax would be most useful? So I talked to Martin Kaney, associate director of VAT at RSM Tenon.
Martin told me that ‘the rules surrounding art are quite complex. You have to consider whether the art that is being sold is a “one-off event’’.
So, perhaps for a family selling off great auntie Mary’s portrait from her misspent youth, which turns out to be a little known daub by John Singer Sargent, VAT won’t be chargeable. But if that portrait was kept in a manor house which was open to the public and run as a business with admission charges, then VAT would be chargeable because the portrait would be deemed to be a business asset.
However, if the portrait was owned and then disposed of by an ‘‘approved body’’ (such as the National Gallery, the British Museum or similar) by ‘‘private treaty sale’’ or other than by sale (if no estate duty, capital transfer tax, inheritance tax or capital gains tax liability arises) then it would be exempt from output VAT’.
Martin also explained, ‘Where art works are purchased for a business purpose then there is entitlement to claim input tax. However, many dealers take advantage of the “second-hand margin scheme” which means only charging output tax on the profit margin (rather than on the full value of the supply)’.
We talked about the definition of a ‘work of art’ for indirect tax purposes and I inwardly smiled and wondered what HMRC thought of Marcel Duchamp’s ‘Fountain’ from 1917.
Money from Monet
Next, I spoke to Paul Ayres. Paul is the head of BDO’s private client practice in London. Alongside being a private client tax partner he is married to one of the UK’s foremost art experts, Charlotte Mullins.
Charlotte has been a Turner Prize judge, is a prolific author, and former editor of the Art Review and is also one of three experts on the BBC’s Show Me The Monet – which is the art world’s equivalent of the X Factor.
I asked Paul if he came across art in his role and he explained: ‘It is actually surprising what links there are to art, whether it be advising a family on IHT and CGT on art or whether it be advising businesses which deal in art. One of our clients is a leading dealer in “old masters” and as part of getting to know their business and understanding how to help them I have visited their premises and also attended an art fair with them in Maastricht’.
Sculpting a career
Thoughts of old masters took me to Christie’s and Ruth Cornett, assistant director of Christie’s heritage and taxation department. Ruth is a fellow Courtauld graduate and after her masters she worked for the V&A, rising to the rank of assistant curator.
As she explained: ‘I was promoted at the V&A and worked in the sculpture department, but could see that my bosses were the pre-eminent sculpture scholars of their field so there wasn’t going to be any room for further promotion. I didn’t want to leave London, so I decided that I would study law and make a change of career.
‘I had originally considered law as a school leaver and turned down a place at Trinity College to study history of art at the Courtauld. Once I had completed my law conversion and legal practice course I took advice on what my next steps should be. Instead of doing articles in a law firm I decided to move into taxation and joined Coopers & Lybrand in 1995. I trained in private client and subsequently worked for KPMG and Buzzacott. I gained some great experience and worked with people like David Kilshaw and Jon Ager.’
Along the way Ruth gained both the CTA and STEP qualifications and in 2010 she returned to the art world and joined Christie’s.
Best of both worlds
For me, Ruth’s role at Christie’s really does combine the best of art and taxation. Her team provides a seamless service for Christie’s clients, working alongside their accountants and advisers to help clients through the process of selling and ensuring that their records are up to date and even that their returns are filled in correctly.
Christie’s keeps records for clients of all the values for their pieces through the ages, and of any tax or death duty which was previously deferred by conditional exemption. Ruth’s role checking historic tax rates and evidence from the family, to work out the history of a piece from a tax point of view, is very similar to the research that an art historian does when looking into an old master. I asked her if she actually got to see the art.
‘Yes, I do; it’s a privilege. I work in the auction house and see the art as it goes to sale, but perhaps the best bit is seeing art in situ in clients’ homes, where I am advising on a conditional exemption claim. I make a point of visiting their houses to see whether they are suitable for public access and to assess how the HMRC would view the claim overall.’
To me, Ruth’s role which involves advising clients on whether a piece of art should have ‘pre-eminent’ status which could allow it to stay with a family or in the place it was designed for, rather than being sold to pay tax, is truly the best marriage of the artistic and the financial worlds.
