The upper tribunal has ruled that a painting by Sir Joshua Reynolds is a “wasting asset” and exempt from capital gains tax.
The custodians of a stately home that featured in the BBC television series Brideshead Revisited, have been spared a large tax bill on the £9.4m sale of a famous eighteenth century painting after winning a tax tribunal.
The tribunal (UKUT 129 (TCC) ruled that the famous painting of Omai, a young South Sea Islander, by Sir Joshua Reynolds that was exhibited in Castle Howard, Yorkshire, was a piece of “plant or machinery” used to boost visit numbers to the house.
Because the painting was categorised as plant or machinery capital gains tax is not payable on the painting when it was sold in auction at Sotheby’s in 2001 by the castle’s present owner, Simon Howard.
Mr Justice Morgan agreed with the owners of Castle Howard (Castle Howard Estates) that the painting was a...