Hunters’ Art Law Department is a team of leading Art lawyers based in central London. Lawyers in the art law team have specialist experience in the area of art and antiquities, where they advise on title disputes, on questions of mis-attribution and authenticity of works of art, about illegally excavated and/or exported goods, and in relation to treasure. The team specialises in litigation relating to cultural and heritage property, advising and representing dealers, collectors and various private and public institutions in a variety of cultural property related disputes.
Q How is Brexit affecting the art market?
A There are no immediate changes in the law while the UK still remains a member of the European Union. However, market sentiment appears to have been affected and there is anecdotal evidence of lots having been withdrawn from auction because of the uncertainty created by Brexit. Foreign buyers were able to pick up a few bargains in London in the immediate aftermath of Brexit as Sterling lost in value against the US Dollar and other reserve currencies. By contrast, foreign galleries will have to increase their prices significantly when they exhibit at the autumn fairs in London, which will likely suppress demand from local buyers. What will happen in the long-term is largely still speculation. The deteriorating economic outlook for the UK is likely to continue to dampen demand in an already stagnant market. Whether international buyers will continue to be attracted to the UK as an art market hub will to some extent depend on future customs and tax arrangements including, for example, the VAT treatment of art works for the purpose of temporary import.
Q Hurray, no more ARR?
A Well, it is true to say that many dealers and galleries hate Artist’s Resale Right with a vengeance and voted for Brexit for this reason alone – but artists and their families may disagree with them. ARR has been incorporated into national UK law and that law will prima facie continue to apply, even after the UK ceases to be a member of the European Union, unless and until amended or repealed. It is well possible that the relevant regulations will eventually be repealed in due course in order to redress the perceived imbalance between the London and New York art market but we don’t know yet.
Q London will always be a centre for the arts and are people not just scaremongering about the consequences of Brexit?
A Creative industries need creative people (whether music, film, visual arts or computer games) and if the free movement of people to the UK will be limited following a Brexit, foreign artists may well decide to take up residence elsewhere and London may well be a less colourful place in future. Likewise, European funding for the arts will fall away. There has been much talk about that funding simply being replaced by national funding but will the UK be able to afford funding the arts if there is an economic downturn and tax take decreases? Government funding for the arts has already seen dramatic budget cuts in the last few years.
Q If I am a foreign art collector resident in London, should I be worried about my personal tax position?
A Matters such as income and capital gains tax are regulated by national UK tax law and bilateral double taxation treaties between individual countries and they will not directly be affected by Brexit. However, in future there may well be financial implications and changes to customs procedures when art is moved across borders, in particular, between EU member states and the UK.
Gregor Kleinknecht – Partner
Gregor’s expertise ranges across multiple practices. He leads a strong contentious and non-contentious international IP practice, focusing on brand protection, and the exploitation, protection and enforcement of trademarks, domain names, design rights and copyright; and a leading practice in art and cultural heritage law.
Contact Gregor here.
This information is based on the law in force as at 26 July 2016. Although we endeavour to ensure that the content is accurate and up to date as at that date, it is designed to provide general guidance only and is not intended to be comprehensive or to constitute professional advice. Specific advice should always be sought, and you should only rely on advice which is given, by reference to particular facts and circumstances.
If you have any further questions, please do not hesitate to contact our Solicitors, who will be able to assist you further.