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).