15th April 2026 | Arthur Byng Nelson | Private Wealth, Art & Heritage, Art Market

A "sleeper" is a work of art acquired below its true market value, typically due to misattribution. Such overlooked masterpieces are actively sought by dealers and a number of enterprising amateur sleuths.

In this context I have been asked to advise: should I be buying my sleeper in my personal name or through a limited company?

The answer will be informed by:

  • Is this likely to be a one-off adventure?
  • Are you buying alone or with co-investors?
  • How significant are the possible values in this or future cases?
  • What is your intended destination for the piece?
  • Is estate planning relevant?

The case for a limited company (SPV)

  1. Liability ring-fencing. The SPV isolates the art asset from the investor’s personal and other business liabilities.
  2. Facilitation of co-investment. Where the hunt is a collaborative venture, an SPV provides a clean vehicle through which multiple investors can hold fractional economic interests via shares or loan notes, avoiding the complexity and personal exposure of a co-ownership arrangement.
  3. Efficient exit mechanics. A share sale rather than by sale of the work itself can be advantageous to both parties: the seller may achieve a cleaner exit without triggering a direct disposal of the asset, and a sophisticated buyer might avoid VAT that applies to imports and the administrative burden of transferring title to a physical object across jurisdictions.
  4. Estate and succession planning. Where estate planning is relevant, shares in an SPV can be transferred or gifted with greater flexibility than the artwork itself. Business Property Relief might be available but in very limited circumstances and only if the SPV could be characterised as carrying on a trade.
  5. Structural clarity for financing. If the successful hunter subsequently seeks to borrow against the work, lenders might prefer to lend to a SPV, with a more transparent legal and financial history.
  6. Scalability. If this is not a one-off adventure, the SPV structure can accommodate future acquisitions within the same limited company, simplifying accounting and investor reporting.

Arguments against an SPV

  1. Disproportionate cost for a one-off. If this is likely to be a single acquisition, incorporation, on-going Companies House filings, annual accounts and eventual dissolution costs may be disproportionate to the commercial benefit.
  2. Corporate tax rates on gains. A company pays Corporation Tax on gains (currently 25% for profits over £250,000) rather than the individual CGT rate (currently 24% for higher and additional rate taxpayers, 18% for basic rate taxpayers).
  3. No personal CGT reliefs. The reliefs available personally to an individual investor are not available at the corporate level.
  4. Double taxation on extraction. Profits realised within the SPV require a further taxable event (dividend, salary or liquidation distribution) to reach the beneficial owner, creating a double-tax dynamic that erodes net profit.
  5. Intended destination of the piece. Where the investor intends to donate the work to a public institution personal ownership is generally more advantageous.

In Part 2, Arthur Byng Nelson will provide more detail on the comparative Capital Gains Tax and Inheritance Tax considerations.

 

This article is for general information only and does not constitute legal or tax advice. Specialist advice should be taken before any acquisition or structuring decision.

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