Thursday, June 24, 2010

Stolen Art Watch, Leonardo Da Vinci Madonna, "Tax is for the Little People"

Tax Does Not have To Be Taxing, So, Pay Your Taxes Duke of Buccleuch

A Little Tax Conundrum

When the painting was stolen in August 2003 the 9th Duke of Buccleuch owned it. Only 25% of the painting was insured hence the payout of £3.8 from Hiscox Limited There was no buy back clause in the insurance policy however Mark Dalrymple negotiated as the loss adjuster and a buyback clause was retrospectively inserted.

75% of the value of the painting was transferred to the Buccleuch Heritage Trust under the chairmanship of The Earl of Dalkeith now the 10th Duke of Buccleuch

On the death of the 9th Duke of Buccleuch the title to the painting passed by Will to the 10th Duke of Buccleuch.

So the painting moves full circle from the 9th Duke to the 10th Duke in effect using the tax vehicle of the charitable trust of the Buccleuch family.

Whilst the painting was in the care of Dumfries and Galloway Police the state covered the insurance liability and the insurance valuation for the purposes of displaying the painting in the National Gallery of Scotland was £20m, which again was paid by the Crown.

HMRC need to consider when the painting was transferred into the Buccleuch charitable trust by the 9th Duke of Buccleuch and the value of the painting at that date. If this was done after September 2000 then the settlement was not made within seven years of death and inheritance tax would be paid as if the settlement had not taken place.

Only Colin Henderson from Anderson Strathern and HMRC know whether in the age of austerity and we are all in this together the taxation treatment has been correct

In the Da Vinci trial it emerged that Hiscox insurance cover was for £15m and they paid out £3.8m. As the Buccleuch trust owner 75% of the painting this would value the painting at £60m.

When post the recovery the 10th Duke of Buccleuch exercised the buy back clause in respect of his £25% an interesting question arises as to whether capital gains tax comes into play and if it did that would be on the current value of the painting.

On the 3 October 2007 John Craig was advised “the lady is coming home” it looks like it will not be before the tourist season for Drumlanrig Castle in 2010 that the Buccleuch family trust will finally sanction “the lady coming home”

Mark Dalrymple can run, but he cannot hide, lost in France, Paris anyone !!!!!!!!

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