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Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

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Friday, November 30, 2012

Dispute Over Painting and Capital Gain Taxes

Images-3A dispute over a £9.4 million painting from Castle Howard is before the Royal Courts of Justice in London.  The painting is a Sir Joshua Reynolds painting known as Omai and it is viewed as possibly the artist's finest work.  For centuries, it graced the walls of Castle Howard.  It was sold at Sotheby's in 2001 to fund Simon Howard's divorce from his wife Annette.  Omai was part of George Howard's estate and his executors have been righting with tax authorities ever since he died in 1984 over whether the £9.4 million should be subject to capital gains tax.  

The executors argue that the painting should be viewed as a "plant" used in running the house as a business because it was essential in bringing visitors to the Castle Howard.  Last year, a tax tribunal dismissed those arguments after pointing out that the painting's sale did not lead to any falling off in visitor numbers.  In fact, visitor numbers have increased by ten percent in subsequent years. The executors are now asking the Upper Tribunal to overturn the tax tribunal's decision. 

See Mike Laycock, Tax Battle Over Castle Howard £9.4 million Painting, The Press, Nov. 30, 2012. 

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

http://lawprofessors.typepad.com/trusts_estates_prof/2012/11/dispute-over-painting-and-capital-gain-taxes.html

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