tax allowances for art dealers

by **sparky1** on Sat Dec 03, 2011 1:48 pm

as an art dealer, can I claim the commission charged by the auction house on the hammer price of a painting as a business expense?

by **maths** on Sat Dec 03, 2011 9:13 pm

by **Incredulum** on Tue Dec 06, 2011 3:27 pm

No and yes.

No if it is buyer's commission - which should be capitalised into the value of your stock and you obtain a tax deduction when you sell the stock. Postage/shipping costs on your purchases should similarly be capitalise into the value of your stock.

Yes if it is seller's commission.

by **sparky1** on Mon Dec 19, 2011 12:08 pm

No if it is buyer's commission - which should be capitalised into the value of your stock and you obtain a tax deduction when you sell the stock. Postage/shipping costs on your purchases should similarly be capitalise into the value of your stock.

Yes if it is seller's commission.[/quote]

Thanks for your reply. Please clarify - If I buy a painting at auction for £100 plus £20 premium (auctioneer's charge) do I account this as £100 stock and £20 expenses but add to stock total as £120? When I sell the painting at say £150 do I account profit as £50 (presuming in this example the buyer picked the painting up from me ie no shipping expenses)?

by **Incredulum** on Mon Dec 19, 2011 12:13 pm

You account for as stock, what you paid the auctioneer for it, i.e. £120.

When, in 2025, you eventually sell the picture for £150, you pay tax on the £30 profit.