A week is a long time

This has been an eventful week for the Trust.

First, Chris Pearson told me on Thursday that our solicitor telephoned to say that Her Majesty's Revenue and Customs have closed the files on our case about the Death Duty on Dave's estate. This had been hanging over us for well over a year and, although I felt sure that we had done everything correctly, it meant all our financial transactions had a deeply worrying shadow hanging over them. Chris, in particular, had been very affected - unable to get work done on the house where he and Dave had lived because of the fear of a potentially enormous tax bill. 

Another interesting development was a three way discussion between Sergei Reviakin, Edward Lucie-Smith and Margaret Mytton comparing some of Dave's work from the 1990s with Andre Masson and Pavel Filonov. Edward had started this off on his visit commenting how some of the works we showed him reminded him of Masson.... 

Animals - Pavel Filonov

Interior - Dave Pearson

Tower - Andre Masson

Rock Pool - Dave Pearson

Finally last night To Byzantium was shown on the Community Channel at 10pm. Apparently it's being shown again tomorrow (Sunday) at 1.30 pm and Wednesday 16th at 10.00pm. 

A lot to be grateful for. 

Following on...

I spent all of yesterday cataloguing the 54 pieces of work we sold at the Open Studios weekend. This means entering them into our Artlook software. Part of the day was also altering the software's default 'Stock Information Sheet' to incorporate the statement that Edward Lucie-Smith advised us to include on the sheet, asking future purchasers to notify the Trust of any change of ownership. Now I can print a full-colour A4 sheet for each buyer that gives them the necessary information about the piece, and its provenance. 

Then this morning I've written a report for the Borough Council on the open studio weekend (they gave us some funding towards it); a suggested Agenda for the Trust meeting this weekend, and a letter to our solicitor with a copy of the 'To Byzantium' DVD because we believe the Customs and Excise inspector looking at the issue of the Estate Duty may well be making his visit shortly. Although the DVD wasn't in any way made for this reason, it happens to function as the lead witness for the defense (!), in that it records, on film, the terrible state of the studio and the work in it at the time of Dave's death, and the tremendous work that has been done to remedy the situation and, as a result, considerably increase the value of the artwork. 

Meanwhile Margaret Mytton is trying to arrange a small exhibition of some of Dave's work in London, although communications are proving frustratingly difficult for her. More of this in a later blog I'm sure...

Estate Duty, continued

Yesterday I went to our solicitor with Chris Pearson to review the current position with regard to the Estate Duty and the current tax situation of the Dave Pearson Trust. 

Our solicitor repeated that we're in a very unusual situation. We took professional advice and that was that Dave's work was almost valueless 'at the time of death', which is the way that an Estate is valued in law - 'at the time of death'. Because Dave had sold no work during the last years of his life there was no sales history for a valuer to go on. Chris repeated that normally he would have kept as many painting as he could in order to remember his father; given some to family and friends, and the rest would have gone with the studio in some version of a house-clearance, i.e. been destroyed.  In that context the valuation Chris gave, with the advice of a professional probate valuer and his solicitor (£5,000), was probably accurate.

But that didn't happen. Instead Chris gave the work into a Trust which is managed by me (Bob Frith), Margaret Mytton, and Chris himself. Anyone who has followed this blog will know the efforts we've gone to in order to enhance Dave Pearson's reputation. In the course of doing this, inevitably, the value of the work has increased and the work now clearly enjoys a much higher value. The story has been taken up my the press, and they have quoted a value in 'millions'. It's this that the HMRC have got hold of and so asked to look again at the Estate. 

So we agreed that our solicitor will reply to HMRC, repeating the facts of the case, and the reasons why the estate was valued the way it was 'at the time of death'. It could be that HMRC will send in a specialist; whatever they do it will probably take some months. The wheels of the taxman turn slowly. 

What was in the letter!

The letter from our solicitor explained that HMRC (Her Majesty's Revenue and Customs) have finally replied to their letter (replying to the query about the value of Dave's estate - given that no professional valuer would put a value on it at his death beyond saying it was 'nominal', or 'valueless'; and then a year or so later various tabloid reports were claiming among other nonsense that it was worth 'millions') sent in October. I have been copied in, as has Chris Pearson, Dave’s son and the third member of the Trust after Margaret Mytton and myself.

The messages in the letters are mixed – nobody is suggesting that anything has been done wrongly or misleadingly, but that’s almost where the good news ends. HMRC seem to have gone over the whole of the probate claim that Chris made and have even questioned the value of the two houses Dave owned (his house, and the studio).

The questions about the paintings, the artwork, are far more complex, and don’t seem to mention or place any value on the fact that we did try very hard to get professional valuations. HMRC want a ‘specialist unit’ to value the work, and I’ve been asked if I have a detailed catalogue of all the work that is unsold! The solicitor assumes this is going to be difficult. Dead right there! Elsewhere though it again mentions that the important value is ‘’at the time of death’ so everything remains ambivalent because the current value is, naturally, considerably more – after all the work the Trust has been doing (i.e. read this blog). So why value now when it isn’t the relevant figure?

Chris and I are seeking a meeting with our solicitors as soon as possible. This will be primarily about the Estate so we’re going as Executors.  Chris is desperate to get this sorted as quickly as possible so we shouldn’t hold anything up at our end. However I think it’s in the nature of HMRC to move at tortoise-like speed, so I can picture it dragging on for ages.

I still feel optimistic in the long run, but dread a long drawn-out period of suspense about all of these issues.

What is in the letter?

This morning I received an email from the Trust's solicitor

"In respect of the estate of the late David Pearson, I have at last recently received a response from HMRC in reply to the letter I sent on the 29th October 2010.  In my letter to you I have enclosed a copy of their reply together with a copy of a letter I have received  today from the Valuation Office Agency along with my comments."

So - at last - a response to the issue of Estate Duty. In particular the fact that on Dave Pearson's death it was impossible for any 'expert' to give us a valuation beyond that it was 'without value'; yet within a year the tabloid press was claiming it was worth 'millions'. Hmmm - can't wait to read those letters.

2011

So after a break from working on Trust business over Christmas and New Year I'm back picking up the reins. One thing is to get the pieces that were on show at the See gallery (a selection of work from Dave's old studio at Globe Arts) into the DPT Catalogue. I had planned to do this months ago but a mix up with Margaret about photographing these works has slowed things down so I'm getting close to forgetting which pieces were in the show and having to rely on my notes. Not something I would advise; we realise we must systemise our photographic recording of exhibitions in the future. I also need to meet with Jackie and Julian of the gallery (I hope to do this later today) and sort out the sales and expenditure on the show. 

Slowly my mind turns back to the on-going issue of the Her Majesty's Revenue and Customs and their query about the value of the work on Dave's death. This really has to be cleared up soon - it's a weight hanging over both the Trust and Chris Pearson. 

Addendum: By the evening I managed to track down and photograph all the paintings from the See exhibition. Julian and Jackie paid a visit too, bringing along two friends who explored the collection in a mood of awe and wonder and then finally bought 6 pieces of work. So it turned out to be 5 hours spent at the studio and, as ever, the revelation of new and unseen (to me) pieces of work; new delights...