A quiet financial revolution is underway at the polished gallery in Mayfair and the rare auction houses of Sotheby’s and Christie.
The wealthiest investors in the UK are increasingly shifting capital to fine arts – not only for aesthetic enjoyment, but also a shrewd, effective store of value.
Once considered as a protection of collectors and connoisseurs, art is now firmly within the purview of the financial elite. In 2023, the global art market was worth more than $65 billion, with the UK accounting for 17%, making it the second largest art economy after the United States. In economic turmoil, soaring interest rates and turbulent stock markets, high-end art has proven to be resilient, especially at the top of the market.
According to Deloitte’s 2024 Arts & Finance Report, 85% of wealth managers now believe art and collectibles are viable components of a diversified wealth portfolio.
“Art is increasingly seen as another hedge,” said Laura Kingsley, wealth consultant at Knightsbridge Home Office. “It’s less relevant to stocks, and crucially, it offers a custom structure that makes it extremely attractive from a tax perspective.”
Tax Attraction of Physical Beauty
Under the UK tax law, fine arts can provide potential capital gains tax (CGT) relief as “movable property” (a tangible, movable project). Art sold for less than £6,000 may be exempted entirely due to movable property waivers, while art sold is sold at a price above this threshold from marginal relief, which usually results in CGT liability below property or stock. Some works, especially those made from materials expected to be downgraded, can even be classified as “waste assets” and therefore are completely exempt from CGT – although HMRC may question this.
For the estate tax (IHT) program, placing artworks in a trust or corporate structure can delay or reduce tax exposure. Plans such as cultural gift programs and acceptance programs that replace cultural gifts allow donors or their heirs to reduce tax liabilities by providing art to public collections, thereby creating financial and cultural value.
“These are powerful tools,” said Fiona Holder, art tax consultant at Withers LLP. “They allow investors to reduce taxes, enhance legacy and avoid forced sales – all of which is an elegant move.”
Strategist for Collector Transformation
Amanda Sloane, a London-based fintech entrepreneur (name change), started with the acquisition of post-war British art in 2016, initially from outside nostalgia. But as values climbed, her strategy developed. Her £2.5 million collection now includes works by Bridget Riley, David Hockney and Frank Auerbach, with a portfolio valuation of £4.1 million by 2025.
Key works were held in Swiss bond warehouses to delay VAT and simplify real estate planning. The series itself was owned through an offshore discretion trust, denied it to IHT, where she donated Hockney sketches through the Cultural Gifts Program, reducing her income tax bill by £180,000.
“At some point, you realize that art is working harder than your index fund,” she said. “Also, I would rather see a Hockney every morning than log in to the ISA.”
Home office embraces structured elegance
Headquartered in Surrey and supported by a third-generation property, the Yewtree family office began investing in contemporary art in 2019. Their £6 million collection includes works by Yayoi Kusama, Banksy and Lynette Yiadom-Boakye. Artwork is built through the UK Limited company, benefiting from tax-deductible storage and maintenance costs. Insurance between private residences and public loans, professional inventory and radiating – strengthening social status and long-term valuation.
As assets are passed to the next generation of assets, gifting strategies through acceptance of teaching programs will ultimately offset the family’s future IHT bill.
“Art offers more than just reward,” the family said. “It tells a story. It represents a legacy. In today’s financial environment, it also provides protection.”
Warnings on canvas
Despite its advantages, art investment is not without risks. Liquidity is an ongoing problem – even high-value works can take years to sell. Valuation is subjective and without proper documentation (called source), artwork may become legally impossible. Investors must also compete with market cycles, fashion trends and forgery risks.
“There is no forged Rothko’s financial services compensation program,” the holder warned. “This is not a DIY pursuit. You need experienced consultants who understand both the art world and tax laws.”
Where money fits the meaning
With regulatory scrutiny and traditional tax strategies gaining attention, fine art offers a unique blend of discretion, diversity and durability. With the right structure and support, it can not only provide capital preservation, but also provide cultural resonance.
In an age when spreadsheets encounter brushstrokes, it seems that wealthy people in Britain are increasingly choosing to hang their assets on the wall and keep them silent.
