Today I undertook and completed the ‘Mediating with Zoom’ – CPD Training course provided by the Society of Mediators in London, which involved practical exercises in hosting a Zoom mediation and results in the award of the Society’s Certificate in Remote Mediation. I am now available to conduct mediations by Zoom, and for information please visit www.ihtbar.com. My new article ‘Back to the Future – Mediation & Estate Planning,’ was completed and submitted to the publishers (Tolley) on Monday. The use of Mediation as a life-time estate and business succession planning process is also linked to: (i) IHT planning using a Family Investment Company (‘FIC’); and (ii) IHT planning for foreign domiciliaries (‘non-doms’) using a tax-efficient Excluded Property Trust (‘EPT’), which is briefly discussed at the end of the article. To read a summary of key points and the introduction please read the blog below. Meanwhile, I would like to take this opportunity to thank Jonathan Dingle, Andrea Barnes; and Zoey White for the excellent course they ran today – which was highly practical, and enables you to earn your wings as a Zoom mediator worldwide.
Monthly Archives: January 2022
Estate Planning for art assets
I recommend the excellent article written by Arthur Byng Nelson, ‘The art of succession’ published in Taxation today. One of the strategies mentioned in the article is lending during the lifetime of a collector. However, this is fraught with legal risk. As the late Professor Norman Palmer wrote in ‘Itinerant Art and the Architecture of Immunity from Legal Process: Questions of Policy and Drafting’ (2001) XVI Art Antiquity and Law 1,
‘Museum documents commonly refer to the transfer of possession of an artwork for the purposes of exhibition as a ”loan”. In fact, many such transfers are not strictly loans but some other form of bailment. [Where] the borrower supplies no consideration for the agreement, the simple loan of a chattel involves no contract at common law.’
In the event of a dispute involving the loan of a work of art, its transportation or conservation, it may be possible to bring an action in tort, contract or bailment. The advantage for the lender of bringing an action styled as breach of the bailment rather than breach of a duty of care, concerns the burden of proof. If construed as a tort, the lender must prove that a duty of care has arisen, and that the borrower had breached it. If construed as a bailment, the burden is reversed: once harm to the object is shown, the borrower must prove that he or she took reasonable care in safeguarding the object. (Extract from ‘Bailment of Art Loans’ written by Professor Norman Palmer for the Institute of Art & Law Diploma in Art Law course in 2000). Careful consideration also needs to be given to the application and scope of the Government Indemnity Scheme, i.e. qualification; the exclusions; and loan pre-conditions. The exclusions include a third party claiming to be entitled to the object. Furthermore, paragraph 4.14 of the Government Indemnity Scheme Guidelines for National Institutions states that while, ‘The Secretary of State may issue section 16 indemnity in respect of items which have been accepted in part or whole satisfaction of estate duty, capital transfer tax or inheritance tax by the Commissioners of HM Revenue and Customs under the acceptance in lieu (AIL) procedure. [That] … in no case will indemnity cover total loss of an object accepted in lieu of capital taxes. … Borrowing national institutions must exercise great care to avoid applying to the Secretary of State for standard indemnity cover in respect of items acquired under the AIL procedure – they should request the modified certificate giving cover only for repairable damage. The Secretary of State will not issue indemnity to national institutions in respect of AIL items held in their own permanent collections.’ In contrast to the simple loan, many bailments both to and from museums, therefore involve highly sophisticated negotiations about the allocation of risks, resulting in legally robust contracts that clearly confer benefits and impose obligations on both sides.