Galleries - January 2012

Oldenburg as Swedish –claims they both refuted as US citizens, it may be interesting to examine one aspect of how the tax works in practice, and why it raises such strong emotions. Even DACS (the Design and Artists Copyright Society) agrees that it leads to inequality between the way auctioneers are treated and other art professionals such as agents or dealers. The auc- tioneers only charge ARR on the hammer price of a work, which means that they lose none of either their seller’s or buyer’s com- mission. Dealers on the other hand are asked to pay the levy on the whole figure that they receive for the work (less the VAT on their commission. Thus if a dealer sells a picture for £10,000, he or she is expected to collect ARR on that figure. The older pictures and ob- jects now to be included may require restoration, conservation and re-framing, plus the transport and insurance connected with this. These costs, incorporated in the total price, also bear the levy. If, say, Sotheby’s were to sell the same picture and the client pays £10,000 (hammer price £8,000), they collect ARR on only £8,000. Small businesses in effect pay a fifth more to the collecting agency than the auctioneers do on the same sale. The auctioneer pays nothing on their commission whereas 4% of the whole selling price eats into any commission the dealer might expect to earn. (Just to recap, a starting level of 4% is levied if the price is between € 1,000 and 50,000, then a sliding scale comes in until € 400,000 when it settles at 0.25%, with the maximum payable being € 12,500.) This is only one of the reasons why organisations such as the British Art Market Federation have been vociferously opposing the tax. The auction houses them- selves are challenging the rules in California and they cannot wel- come the forthcoming widening of the net. Art fairs in countries not signed up to ARR (such as Basel and Miami) may well be rubbing their hands in anticipation. One of the brightest areas of the UK art market recently has been Twentieth Century/Modern British. Here is a selection of the estates now caught in the ARR net. Stand- ing on the cusp are Ravilious, Steer, Sickert and Wallis (all died in 1942) but since then we’ve had a glorious haul: Ardizzone, Ayrton, Bawden, Bell, Bomberg, Burra, Butler, Clausen, Colquhoun, Cun- dall, Davison, Dobson, Eardley, Epstein, Ginner, Grant, Hennell, Hepworth, Hilton, Hitchens, John (A not G), Kennington, Kramer, Lanyon, Lewis, Lowry, Minton, Munnings, Nash (P and J), Nevin- son, Nicholson (B and W), Piper, Richardson, Roberts, Rogers, Spencer, Smith, Sutherland, Un- derwood, Vaughan, Wadsworth, not to mention those who have gone in the past 25 years. If this doesn’t have you checking expiry dates you must be the generous sort who enjoys contributing to the impecunious descendants of Picasso, Dali, Magritte . . . 36. GALLERIES JANUARY 12 Sometimes the law of unforeseen consequences begins to look per- ilously like the law of foreseen, but deliberately ignored, consequen- ces, at least as far as the EC is concerned. A case in point is the wrangling over the rights and wrongs of introducing droit de suite, or Artist’s Resale Right. The Cassandras predicted a flight from these shores of many lucrative deals when the levy was pushed through under EC harmonisation directives in 2006. In fact, the mar- ket has done quite well, largely buoyed up by a feeling that at a time when few assets can be de- pended upon to hold their value, one might as well move money into a commodity that gives plea- sure (classic cars being another area that has flourished). But on 1st January 2012, the net for ARR is extended in the UK to cover not just living artists but those who have been dead for less than 70 years. It is also going to be ex- tended to non-UK or EU citizens, if such are the heirs of the artists. Leaving aside the shaky philo- sophical basis for the tax (why artists if not architects for in- stance?), the fact that the tax is levied every time the article chan- ges hands (regardless of whether it has increased in value or not), the strangely belligerent way in which it is enforced (artists are not allowed to opt out of the system), and the handsome fees charged by the collecting agencies for administration (though making howlers such as classifying Christo as Bulgarian and Claes SUITEART DEAL? Sarah Drury examines the nuts & bolts of the new artists’ resale rights