Readers’ forum: Sale of artworks through foreign company

While living overseas X sold on the open market part of his personal collection of works of art through a local company Y of which he is the sole shareholder and director and which is registered in country Z. Y retained a commission per sale and returned the net proceeds of sale to X. Y’s balance sheet shows a small cumulative loss.

After some 11 years living overseas X who is a non-UK domiciliary sold in January 2017 his remaining collection of art to Y for its market value with a corresponding credit to his director’s loan account before becoming UK resident shortly after 5 April 2017. The valuation was prepared by X who is an expert in this category of highly specialised art. X considers that the value of the art is no higher now than it was in January 2017...