Gibraltar: Collection Art In Gibraltar Is Now Less Taxing

I'm not entirely sure how it all happened so fast, but 2014 is half done already and here I am writing the August column. It's the time when many of us are thinking about relaxing with families and friends, either at home or further afield. As my aim in this column is to match the season, I intended to pen a relaxed piece – lazy days on the beach, piña colada in hand. I'm sure you get the picture. But then, "events, dear boy, events".

My reverie was rudely interrupted by that strangest of seasonal phenomena – the Gibraltar Budget. Not for us a statement in chilly November or a lengthy speech in March. No, we have to wait until the start of the holiday season. As I pen this piece, the financial statement has just been issued and debated in parliament. We are also approaching the point of time in the electoral cycle where politics becomes a dominant factor – as if it ever really goes away here in Gibraltar – and the horse-trading between government and opposition is to be expected. I will consider some of the Budget measures in future articles but, as we (or at least you) head off for a break, one particular item came as a pleasant surprise. Read on.

I cannot help noticing that even here in Gibraltar we are seeing increasing use of one of Westminster's favourite political tricks – the pre-announcement announcement or, as others might put it, the deliberate leak. In this way, details of a planned policy are made public a couple of weeks before the statement itself – when it is repeated. This allows politicians to get two bites at the cherry – either to whet the public appetite for a popular measure or dilute the impact of potential bad news.

On this occasion, our Chief Minister Fabian Picardo announced, during a dinner speech a couple of weeks before the annual Budget on 30 June, a proposal to scrap the import duty on art. Sure enough, it was re-announced in the Budget statement together with a whole raft of other welcome measures along the same lines. From now on, we shall be able to import a much wider range of goods free of duty. The list includes yachts under 18m in length, mobile phones, musical instruments, sunglasses and even umbrellas – not that it ever rains in Gibraltar, of course!

This was welcome news as art happens to be a personal passion for me and I have written in the past about its use as an alternative investment. There are several reasons for the growth in this recognised "alternative asset class" over recent years – near zero interest rates, low inflation, not to mention a reluctance to invest in more traditional classes such as stocks and bonds. Those with money have had to look at other "stores of wealth".

We are well used to screaming headlines from the art world, especially when it comes to fabulous sale prices at auction. Just this month, a Francis Bacon triptych sold in London for £26.7m. This staggering amount is all the more remarkable considering it was painted less than 50 years ago. However this was dwarfed by the amount paid last November at Christie's for the same artist's larger-scale work "Three Studies of Lucien Freud", which set a world record for the most expensive artwork ever sold at auction. The gavel eventually came down at US$142m – around £83.7m at current exchange rates.

If one includes "collectibles" in a broad definition of art, a sale in New York in May also saw a very rare 19th Century British Guiana postage stamp – the "One-Cent Magenta" – sell for US$9.5m (£5.6m). No a bad return from one cent! As well as setting a new world record for a stamp, Sotheby's said the lot was the most expensive by weight and size ever sold.

All mouth-watering stuff but I doubt it was these heady heights that our Chief Minister had in mind when he decided to do away with import duty on artwork. So perhaps it is time to return to the real world.

Let's consider the local art scene, viewed (as always in this column) from the financial angle. It is easy to find details of exhibitions at the numerous galleries and other local venues on the Rock that are happily increasing all the time. In addition, Gibraltar boasts a number of local art groups and appreciation societies – including Gibraltar Decorative and Fine Arts Society with which I have been closely associated since its launch four years ago.

I have written in the past that Gibraltar is home to a hugely impressive number of world-class artists and with plenty more aspiring talent bursting on to the scene. The Budget also called for the elimination of duty on other all types of stationery including some artists' materials such as pens and pencils – so the new concessions are therefore not limited to finished oeuvres.

So will this lead to an immediate deluge of art imported into Gibraltar? Probably not, but was this really the point of the exercise? The more important issue, I think, is that all types of art can now be imported without the need to add any excise duty. Hopefully then Gibraltar-based art lovers will have a wider choice and be able to purchase items abroad in galleries or at auctions. It should be borne in mind that Gibraltar has no export duty either, so artwork can now be freely imported then re-exported, but the rules in other countries vary so these should also be taken into consideration.

I am often asked about the acquisition of art as an investment and indeed I have written on this topic previously. In addition to the purchase price, a number of important factors come into play that should be considered. Import duty was one such hurdle and its demise is to be welcomed, but there are other hidden costs to consider.

These include where the artwork is to be stored – or displayed – and under what conditions. Our climate isn't the easiest for holding expensive artwork; storage facilities if required can be expensive and hard to find. Insurance is also an issue, although locally-based brokers with the necessary expertise are available (do ask me for an introduction). Remember that replacement value is not the only factor. Even if good title and provenance are assured, things can go wrong. There was the hapless British collector whose treasured possession of a Marc Chagall work came to an unhappy end when it was declared to be a fake by the Paris-based Chagall Committee who ordered it be destroyed under French law? Caveat emptor.

An art expert friend of mine always advises clients about to start an art collection to buy pieces they really like – something they want to live with every day. Indeed, this is how we have gone about building our very modest collection at home – focussing on pieces we like irrespective of value. It is gratifying then that one painting is now worth many times more than the price we paid for it 20-years ago – enough for a Caribbean cruise say – but that wasn't the reason we bought it and I cannot imagine selling it willingly any time soon.

So while the elimination of import duty is unlikely to lead to long queues of trucks loaded with objets d'art waiting to cross the frontier into Gibraltar, I hope that it will add to the many advantages Gibraltar already offers to high net worth individuals considering a new country of residence, complementing the lack of capital gains and inheritance tax. In my day job I advise HNWIs considering Gibraltar's Category 2 residency rules; maybe now is the time to focus particularly on wealthy art collectors who may wish to bring their collections with them. The tax changes are likely to encourage those who collect, buy or sell art, whether for aesthetic or investment reasons, to consider Gibraltar as an excellent tax free forum.

Enjoy the summer.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions