Individuals who personally hold valuable art collections but do not have a requirement to utilise these assets (e.g. they may no longer wish to display the artwork in their home) may wish to receive a tangible benefit from what would ordinarily be a non-income generating asset.  A tangible benefit can be achieved by placing the artwork into a structure and approaching a finance company to obtain a loan based on its value and secured against it.  The loan would be suitable to the client/value of the artwork at rates appropriate to the risk/return.  These funds can then be invested/utilised as appropriate to generate an income stream.

The function of ensuring the safekeeping and maintenance of the artwork, such as insurance, custodianship, will be performed by the structure as will the practicalities of liaising with the finance company to obtain the finance.  In essence the structure takes on the duties that would be performed previously by the individual in holding, maintaining and securing the artwork.

Depending on personal circumstances, an individual transferring art into a structure may achieve the following;

• Maximise Tax Efficiency,
• Succession Planning,
• Avoidance of Forced Heirship,
• Confidentiality,
• Centralised Holding and Reporting.

For more information please contact: emer.dowling@abacusiom.com