Be it with ultra-contemporaries, old masters, antiquities, memorabilia or even fossils, furnishing your new home with a collection is an exciting venture. There is, dare I say, a 'blank canvas' to define your interests and aesthetic and make the place truly yours.
When dealing with high-value pieces, plan and prepare. As a lawyer in Mishcon de Reya's Art Law team, I have seen what can go wrong: from forgeries to scams, ownership claims to damage, and even unexpected tax liabilities. In this three-part series, I discuss the various stages of art ownership and how you can protect yourself along the way.
Stage three: moving on
In the first two parts of this series, we explored the legal and practical considerations of acquiring and enjoying art in your home. But what happens when you decide to part ways with a piece, or even your whole collection? The disposal of art can bring its own set of legal challenges but it also offers a host of opportunities for you to share your collection, curate your legacy and even unlock tax benefits. This article sets out the various options available for disposal and highlights key factors to help you make an informed decision.
Making a sale
The art market today offers many routes for sales, each with its own advantages and considerations, depending on the type of artwork, the sellers' intentions, the need for privacy and jurisdiction. Private sales offer confidentiality, targeted approaches and flexibility in timing, though they naturally limit your potential buyer pool. Auctions can be beneficial when there's strong market interest or a diverse pool of buyers is required, but due to the public nature of the auction process there is a risk of a work being "burned" if it fails to sell. An art adviser can assist in ensuring that the right strategy is taken to maximise value. It is also important to consider trends and developments in the market (for example, see our 2025 report on the China art market).
For high-value or internationally recognised works, cross-border transactions can add complexity: export licences, customs duties, and international tax treaties may all come into play and specialist advice is recommended. Regardless of your chosen route, any contracts must be comprehensive in covering title transfer, payment terms, additional fees, representations, warranties, transportation, and liability. Capital gains tax implications also require careful consideration, particularly for works that have appreciated in value.
The benefits of gifting
Art philanthropy can be a deeply satisfying and powerful way to support charitable causes and share art and its appreciation with the public. A well-drafted agreement is essential to ensure that the gift is properly executed, covering terms relating to publicity, display, maintenance, and future lending arrangements. The UK offers attractive tax advantages through the Acceptance in Lieu and Cultural Gifts schemes. These involve a formal process requiring comprehensive documentation of provenance, value, and condition, but can provide substantial benefits for qualifying works and institutions. Gifting to family or friends can also have tax advantages, with the appropriate advice. A formal contract remains advisable to clarify ownership transfer and liability.
Legacy through charity
Creating a charitable foundation or trust is a powerful way to create a legacy demonstrating commitment to the arts. It can include displaying artwork, offering grants to artists and arts students and funding exhibitions. Charities are, however, heavily regulated, requiring a clear charitable purpose, governance structure, and ongoing compliance. Without proper constitution, there is a risk of regulatory intervention, loss of tax relief, and even personal liability for trustees. Ongoing obligations include maintaining accurate records, filing annual returns, and ensuring that the art serves its charitable purpose. Appropriate professional guidance is therefore essential. At Mishcon de Reya, the Art Law and Charities team work together with clients to help build art and cultural property philanthropic foundations and charities, often with the intention of establishing and promoting a collection's legacy.
Exhibition loans
Another approach that collectors can take is to loan artworks to museums and galleries. These can be for specific exhibitions or long-term displays. The advantages include sharing art with the public and saving on the costs of storage and insurance albeit for a defined period. In the right circumstances this can enhance the reputation of the artwork adding to its visibility and exhibition history. This can help establish the authenticity of certain artworks at the right level, which in turn can assist with value. However, potential lenders need to do their due diligence on the borrowing entity, considering issues such as security and reputation. Clear advice on loan terms can go a long way in protecting art and its value.
Unlocking hidden value: using art as collateral
Finally, if you are not ready to dispose of your collection permanently, using art as security for financing is another opportunity. In certain circumstances, this can be achieved without the art leaving its location. The law in this area is complex and requires careful advice on both the process and associated risks. In such instances, our Art Law team works closely with the Finance team, to provide tailored guidance on alternative security arrangements (see more on this here).
Moving forward
The disposal of art presents an opportunity to celebrate the completion of your collecting journey whilst opening new possibilities for others to appreciate your endeavours. With the right advice, potential hurdles and risks are minimised, enabling a confident and focused strategy to realise objectives, be it financial, philanthropic, or personal satisfaction.
Mishcon de Reya’s Art Law team is here to make every stage, from acquisition to disposal, secure and enjoyable, so you can continue to take pleasure in your art, whatever the next chapter holds.
For questions about selling, gifting, or establishing a foundation for your art, please feel free to contact lavinia.denazelle@mishcon.com or any member of Mishcon de Reya's Art Law team.