Inheritance tax and the market

What is inheritance tax on collections?

It is the tax an heir pays on the value of what they have inherited, including paintings, sculptures or an entire art collection. In a number of countries abroad it tends to be quite high on valuable collections. Inheriting a rare collection therefore means not only joy but also an obligation towards the state.

How does it show on the market?

Because the tax tends to be high, heirs often prefer to part with the works: they donate them to institutions or send them to market. This is one way of raising the cash to pay the tax, or of avoiding the obligation by making a gift. The decision often comes soon after the owner's death.

Why does it matter to a collector?

Inheritance tax explains why large, long-hidden collections suddenly appear at auction. For a collector it means a rare opportunity to acquire works that were out of reach for years. Where else would so many fine things come together at once?

What should you watch out for?

When a large collection comes to market through an inheritance, it can be an exceptional opportunity — but also a moment when many similar works arrive at once, so it is worth considering the right timing. An origin in a well-known collection (provenance) also often adds to a work's value. It therefore pays to watch where a work came to market from, and why.

— Anna Pulkertová, founder of Art Part Club