In 2023, the global art market reached a value exceeding $65 billion, with the UK holding a notable 17 percent share. Wealthy investors view fine art not just as aesthetic enjoyment but as a strategic investment. High-end art remains resilient despite economic challenges, and 85 percent of wealth managers consider art viable for diversified portfolios. UK tax laws provide potential advantages for art investments, such as capital gains tax relief and inheritance tax planning opportunities through trusts or corporate structures.
"Art is increasingly seen as an alternative hedge," says Laura Kingsley, a wealth advisor at a Knightsbridge family office. "It's less correlated to equities and, crucially, offers bespoke structures that make it extremely attractive from a tax perspective."
Under UK tax law, fine art can qualify as a "chattel" - a tangible, movable item - offering potential capital gains tax (CGT) relief. Artworks sold for less than £6,000 may be exempt entirely due to the chattel exemption, while those sold above this threshold benefit from marginal relief, often resulting in a lower CGT liability than property or shares.
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