can a from-home-business buy a painting?

Didn't find your answer?

Tried a general google seach on this and foudn a long discussion on 'pistonheads' that had lots of varied views

Limited company, works from director's home (me). Can it buy a painting as an investment and store it at said home (but not wrapped up in the attic, but on the wall)?

I guess this is a bit of a grey area. Going ahead and buying it 'personally' but might transfer it across to business dependent on responses.

Replies (29)

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By Tim Vane
08th Jun 2019 08:44

It’s a free country last time I looked. No law against buying or hanging a painting.

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By Adam12345
08th Jun 2019 09:52

The company is free to spend it's money how it wishes. For example, it could use some of its cash for professional advice :)

There are undoubtedly tax consequences to such a transaction though.

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RLI
By lionofludesch
08th Jun 2019 10:16

It's not a grey area at all.

The good news is, yes, you can.

The bad news is, there's no deduction from trading profits for investment art. So, if you're looking for a Government subsidy for your purchase, forget it.

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By Accountant A
08th Jun 2019 12:52

There's case law on this: Norfolk v Chance

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Replying to Accountant A:
By Tim Vane
08th Jun 2019 14:03

Accountant A wrote:

There's case law on this: Norfolk v Chance

Are you suggesting that a limited company cannot buy a painting? That is utter hogwash, and I think you know it.

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Replying to Tim Vane:
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By Accountant A
08th Jun 2019 14:45

Tim Vane wrote:

>Are you suggesting that a limited company cannot buy a painting? That is utter hogwash, and I think you know it.

I'm a mind reader which allows me access into the mind of the OP. I have to say, it's pretty roomy in there!

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Replying to Accountant A:
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By JohnnhoJ
11th Jun 2019 14:05

no need to insult (unless you mean large rather than empty)

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By Retired Dave
08th Jun 2019 15:02

Can you buy it? - Yes.
Can you offset it against tax? - No.

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By paul.benny
10th Jun 2019 11:00

Basics of company taxation:

All income is taxable. You can deduct expenditure that is “wholly and exclusively” for the purposes of the business to arrive at the taxable profit.

Whilst there are a few places where the wholly and exclusively rule is little elastic, it’s pretty difficult to make a case that artwork hung on the wall of your home is for the purpose of your business.

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By MissAccounting
10th Jun 2019 12:07

If its a £10 one from Ikea then you're good to go!

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By Vile Nortin Naipaan
10th Jun 2019 12:11

Remuneration is definitely tax-deductible!

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By tonycourt
10th Jun 2019 12:27

It turns out that the OP's company's businesses is interior design and the director who opens his home to customers and the painting hangs as part of a his showroom :-)

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Replying to tonycourt:
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By Vile Nortin Naipaan
10th Jun 2019 12:39

Does he have a showroom, where the painting is hung? or is he opening his home, where the painting is hung? It can't be both, and the two have different consequences.

Rockall may be in point. And one would need to consider whether it was more akin to his yachts, or his clocks.

http://www.bailii.org/uk/cases/UKFTT/TC/2014/TC03767.html

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Replying to Vile Nortin Naipaan:
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By tonycourt
10th Jun 2019 12:48

I was playing devils advocate - i doubt very much that the OP's business is one of interior design. I was just making the point that it's easy to jump on the bandwagon, or rather shoot first and ask questions later.

A home can incorporate a showroom - if there's use of it for domestic purposes the question then is whether there's duality of use or whether any domestic use is incidental. But I take your point.

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By Matrix
10th Jun 2019 12:36

I cannot see any connection to the business. This expenditure should be treated in the same way as any other money taken out the company by the Director/shareholder. So either payroll or book to the Director loan account.

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Replying to Matrix:
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By Vile Nortin Naipaan
10th Jun 2019 12:39

The company can pay for a painting to be hung on the wall of the director's property, and I see no reason why it should not either (a) qualify as a revenue expense or (b) qualify for AIA, depending on who will own the painting after it's purchase.

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Replying to Vile Nortin Naipaan:
paddle steamer
By DJKL
10th Jun 2019 13:09

Good to know my Utrillo " La Lapin Agile" , specially imported from the US via E Bay for all of £16.67 ,including customs clearance , and now on the mantlepiece in my study, might have qualified for tax relief. Wonder how much the framing will cost? (with my pictures usually at least 3-4 times the cost of the paintings themselves)

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Replying to DJKL:
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By Vile Nortin Naipaan
10th Jun 2019 13:13

Well, at that price the tax on the benefit in kind should be minimal.

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Replying to Vile Nortin Naipaan:
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By tonycourt
10th Jun 2019 13:27

Or one might even say "trivial"

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By Vile Nortin Naipaan
10th Jun 2019 13:30

Well, once it's been framed, it;'s between £67 and £83, so just a little bit much to be trivial.

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Replying to Vile Nortin Naipaan:
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By tonycourt
10th Jun 2019 14:07

Ooo! A picture, that's a nice trivial perk. Thanks. Sometime later ..... would you like that perk framed for £50 all in?

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Replying to Vile Nortin Naipaan:
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By Matrix
10th Jun 2019 13:13

a) so the expense would need to be payrolled, as I said
b) there is no indication that it is plant in the OP

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By Vile Nortin Naipaan
10th Jun 2019 13:15

a) why? the company can buy the asset and give it to the director, and it isn't payrollable.
b) or the company can retain ownership of the asset and use it to remunerate the individual over a period of years.

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By Montrose
10th Jun 2019 15:07

"Can"-why not?
Consequences-ah that's a different question.
Think about:-
1]Taxable benefits and your personal income tax
2]IHT - if the figures are substantial would the picture be an "excepted asset"?

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Replying to Montrose:
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By tonycourt
10th Jun 2019 15:15

The IHT point is neutral unless the value and use of the painting make the company one which deals mainly in investments.

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By Vile Nortin Naipaan
10th Jun 2019 15:25

Neutral between personal v corporate ownership, but not neutral between having a painting and, say, having some cash that we're going to use for a business purpose in a few years time, honest.

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Replying to Vile Nortin Naipaan:
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By tonycourt
10th Jun 2019 15:47

Yes, but to get to that point you're making a few assumptions too far in my view e.g. has it got the cash now? would it otherwise spend the cash?

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By Tax Dragon
10th Jun 2019 16:47

tonycourt wrote:

The IHT point is neutral unless the value and use of the painting make the company one which deals mainly in investments.

Whoa... are assets used to provide BIKs not used wholly or mainly for the purposes of the business concerned?

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Replying to Tax Dragon:
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By Vile Nortin Naipaan
10th Jun 2019 16:53

To be fair, that was Montrose's point, rather than Tony's point. Tony was just saying that personal ownership versus corporate ownership with the asset being an excepted asset (Montrose's point) puts you in largely the same place.

I'm sure we've completely lost the OP now - which is obviously a crying shame - but at least there's been no out of pram toy throwing.

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