Thursday, 12 January 2017

Reassessment - Part 3

The Trust members met together on 4th January to discuss the things we had learned from Amanda Freeman of Myerson Solicitors. Margaret Mytton and I had had a second meeting with Amanda on the 16th December to clarify things still further, and now we needed to talk things over with Chris Pearson. 

Since our earlier meeting (see Reassessment - Part 2 below) we had heard from Forbes Dawson, a tax specialist called in by Myerson, and their advice was to close the Trust and set up a Limited Company instead, in order to better manage the affairs of the Dave Pearson Estate. 

In fact, a one-off opportunity exists to do this before the 10th anniversary of the Trust. After that the option to undo Trust status no longer exists in law, and the Estate would continue - every 10 years - to have to undergo Estate Duty reassessment. It would mean that, as a result of all the work that I and others have done since Dave's death, there would be a considerable increase in value of the Estate since his death. This would be taxed, and a similar re-assessment - and the accompanying taxation - would have to be done very 10 years. 

But by withdrawing the Trust structure, there will be no need for such a reassessment; instead tax will simply be paid on all sales as with any other business, and this can be offset against our expenses (which it can't for a Trust). Further, as a limited company we can pay agents, or directors, to help us sell Dave's work. 

So Chris, Margaret and I have agreed to close the Dave Pearson Trust and to establish a new limited company. This will be done over the next 12 months. Chris will be the sole Shareholder, so the terms of Dave's will - that the Estate is left to his son - will continue to be met.



The limited company will need to compensate Directors and Agents in a way that the Trust did not, as Trustees must do any work for free. So increasing sales of Dave's work will become even more important. Not only to keep the studio afloat, the work being catalogued and archived, but now the need to pay some level of fees to anyone helping in this process. 

Fortunately we're continuing to make links in this respect, and Ed Perry of the Colourfield Gallery in Poynton visited over the holiday period and has taken away several works by Dave for sale at the Gallery and online (click here to see the Colourfield Gallery page). Ed was very enthusiastic about the link between his gallery and the Trust, and took away some especially strong pieces of work (see picture, above, for a taster).

Saturday, 24 December 2016

Best wishes from the Dave Pearson Trust


Page from one of the 14 notebooks left by Dave Pearson that include his research on Calendar Customs. 

Thursday, 27 October 2016

Reassessment - Part 2


This morning the three members of the Dave Pearson Trust - Margaret Mytton, Chris Pearson, and I, went to meet Amanda Freeman of Myerson Solicitors in Altrincham. Amanda has particular experience in wills and inheritance tax planning, and knowledge of estates and trusts. We chose Myerson since they are a law practice recommended by Artlaw.  

Amanda quickly made us feel relaxed, despite us being beginners in understanding the law in these areas. All three of us would admit to being naive about this complex area of law, even though we have been acting as trustees for over 7 years. She listened to our concerns, and asked us a number of questions about the Trust. We had with us a copy of the Will, the Trust documents, and an account of the Trust's financial dealings since 2008 (as well as our passports to show that we were who we claimed to be). 

She said that, well, we had come at exactly the right time - as there are still over two years left before (because of the 10 year rule) we need to be reassessed for Estate Duty. She said that this will give us adequate time to decide what course of action to take and then to go to the Inland Revenue to discuss the Trust's tax affairs. 


One thing I had never fully understood and which Amanda clarified for me, was the fact that the kind of Trust we are (apparently a 'Relevant Property Trust') can make over what is called a 'Holdover Election'. This can only be done within the first 10 years of a Trust existence. In effect, it would enable us, if we chose, to return the Estate back to Chris Pearson, who was the sole beneficiary of the Will as Dave's son. 

The advantage of this to the Trust would be that the Estate Duty issue would then cease to exist - although Capital Gains Tax would still need to be paid on any sales of the work. It would mean that Margaret and I would no longer be Trustees, and the Trust would be wound up. The downside is that it would place all the responsibility for the paintings and the tax back with Chris - and it was to avoid precisely this that was the main reason for establishing the Trust in the first place. 

Still, many things have changed over the last decade. For a start, we now know far more about exactly what artwork the Estate owns, and we also have more knowledge about the value of individual pieces of work than we had in 2009. This information would help Chris should we decide to wind up the Trust - and there's also no reason why we shouldn't continue to help Chris should he want us to, or equally he could employ others to give him that support.

But all of this is still a way away. All three Trustees will no doubt think over what we learned from Amanda today, and she is suggesting that we have another meeting soon with one of her colleagues who is an expert on the art market. After that, it will be time to make a  decision on what course of action we want to take and then make our submission to the Inland Revenue.





Thursday, 13 October 2016

Reassessment - Part 1

Anyone reading this blog since I started writing it shortly after Dave Pearson's death in the summer of 2008 will remember that one of the biggest issues we (the Dave Pearson Trust) faced in the early days was the problem of valuing his work for Estate Duty. The problems we had to overcome were complex, if not exactly unusual with artist's estates, and for those reasons I started recording our progress in this blog.

Dave sold work throughout his life, but it was never a preoccupation. He earned enough from lecturing to cover his needs, and ultimately preferred to spend his time painting than bothering too much about galleries, or his reputation.

Like many artists he died leaving behind a lot of work. In his case an awful lot. I estimated between 14,000 and 20,000 pieces at the time, and at this point, after several years of careful cataloguing, we've archived 12,000 pieces. The likely final number will be about 16,000 pieces.

Because Dave had not sold anything in the 5 years prior to his death there was nothing to base value on. I approached two reputable companies who specialised in valuing art works and estates. When I described the situation they lost interest. I couldn't get anyone to visit the studio and take a look. In the end the Inland Revenue accepted a very low figure - £5000 I seem to remember – which did little more than reflect the value of the canvas, wood paper and paint left behind in the studio.



But the story doesn't end there. There's a '10-year rule', and every 10 years the value of an estate, if its held in trust, is reassessed, and tax rules are re-applied. At this point working it out gets extremely complicated as various rules, involving percentages of percentages are applied. If there's a a significant increase in value, then Capital Gains Tax might also apply.

After the first few years, and after the Inland Revenue wrote to say that they accepted our valuation, we've let things lie. But now, with less than two years to go before the 10 year anniversary, we've had to start thinking again about our valuation issue. It's frankly too complex a subject for any of the Trustees to handle, and even our decent local solicitor has recommended that we seek specialist advice.

There's an irony in the underlying situation in that we formed the Trust to save Dave's work, and help to foster and develop his reputation. It's meant archiving and safely storing the work, and this has meant that we've sold work in order to cover our costs. No one makes money from this – we employ a part-time archivist, and we pay rent on the studio. Any income beyond this will, in the end, go to Dave Pearson's son.

By doing the work we're doing, however, we've inevitably considerably increased the value of the work. So its clear that today a valuation would have to be considerably higher than the initial £5000. If we say that the 15,000 pieces left were worth an average of £50 each, then the estate would be valued at £750,000 – a huge increase, with god-knows-what tax implication. But of course nearly all of this work lies in storage – the value is only potential value, IF it were all sold. In any case that £50 is probably rather low. So this is where the negotiations really begin, and why – after looking through the very useful Artlaw pages online (http://www.artquest.org.uk/artlaw/) - we're about to go and talk to a solicitor who specialises in this kind of thing.


To be continued...soon.

Thursday, 6 October 2016

Art Trail and more...


We had a very successful Open Weekend as part of Rossendale Art Trail; 40 visitors on Saturday, 75 on Sunday, and we made a number of sales. Most of all though there were lots of new faces to be seen, and clearly much interest and enthusiasm - with plenty of people staying in the studio for close to an hour, or over.

This week I take a dozen painting to York ('According to McGee') where Dave shares the first of the 'Modern Masters' joint shows with Barry de More. We've also agreed that the Turnpike in Leigh will host a large scale show of Dave's work in the autumn of 2018. There's discussions too with Dean Clough in Halifax - so a palpable sense of movement and interest in the collection.

Discussing things with visitors over the weekend, and with Ella Cole having now catalogued 12,000 pieces of work, we feel its time to look to the future, both of the studio and the collection. Over the next few weeks I'll be involved in meetings with artists, the Trustees and others, to draw up a plan that will renew our commitment to Dave Pearson's legacy and reputation.


Wednesday, 21 September 2016

The 2016 Art Trail weekend - Oct 1st/2nd



The Dave Pearson Trust is again taking part in the Rossendale Open Studios Art Trail on the weekend of the 1st and 2nd October. The studio at 54 Manchester Rd in Haslingden will be open from 11am until 5pm on both days. Admission is, of course, free. 

The weekend Open Studios will be bigger than ever, with 14 different studios  and workshops opening to the public, showing the work of a total of 33 artists. It's a great event and takes place throughout the Rossendale Valley - from Whitworth to Haslingden. This year there are 5 participating venues in the Haslingden/Helmshore area alone. 

Free, fully illustrated 12-page brochures are available from all participating venues and local libraries. 

At the Dave Pearson Studio you'll see the progress we've made in cataloguing the work, and Ella expects to have catalogued about 12,000 piece of work by the open weekend. There's a new sense of order as a result - plenty of work on the walls, but also boxes and boxes of artwork that are now labelled, photographed and fully listed in the archive. 




Saturday, 27 August 2016

Modern Masters




The holiday period is coming to a close and both Ella and I will be back to regular work at the Dave Pearson Trust. 

No apologies for yet another post focusing (above) on the reprints by Alan Birch of some of Dave's spectacular 'Calendar Custom' prints. 

News update - the York exhibition at the According to McGee gallery is due to open on Saturday 10th September at 12pm. This is an opening of the group of exhibitions themed as 'Modern Masters' and introduces a sample of works by the artists who will be represented later in the series - so don't expect a Dave Pearson exhibition, but it will include a few of his works, including at least one of the new prints. The gallery is in the centre of York, at 8 Tower Street, YO1 9SA - opposite Cliffords Tower. 

I've a meeting at the Turnpike Gallery in a week or so, and the idea of holding a big exhibition at this gallery (which Dave first exhibited in almost 25 years ago) looks as if it's coming closer  to fruition.