Month: January 2026

Sotheby’s and Forsters – An Owner’s Guide to Art – Part 5

  • 30 January 2026
  • News
A hand mixes paint using a palette knife, hovering over a colourful artist's palette with various paint blobs, in a warm, softly lit workspace.

Last updated: January 2026

Buying and owning art can be one of life’s greatest joys. But while the drive to own art is often fuelled by an emotional connection with a piece or the prospect of holding a lucrative investment, it is important for buyers and owners of art to keep their wits about them, from both a legal and practical perspective.

Felix Hale (Sotheby’s Tax, Heritage and UK Museums Team) and Jo Thompson (Forsters LLP’s Art Group) aim to point those wanting to buy, sell, and hold works of art in the right direction. This five-part mini-series will cover the following key areas:

  1. Acquiring and selling art
  2. Transporting art
  3. Maintaining your collection
  4. Passing on your art collection to the next generation
  5. Art and philanthropy

This piece is aimed primarily at private individuals with a UK tax exposure.

Part 5 – Art and Philanthropy

There are a wide range of philanthropic schemes in the UK that incentivise owners of art to support museums and galleries. In some cases, the tax benefits associated with the schemes are such that owners can end up in a better financial position than they would have been had they sold their works on the open market. Offers in lieu of inheritance tax and Private Treaty Sales to certain UK institutions offer some of the most significant incentives and enrich owners and the UK national heritage alike!

A. The Cultural Gifts Scheme

The Cultural Gifts Scheme incentivises owners of ‘pre-eminent” works of art and other objects to donate them to museums and galleries in the UK. To qualify as ‘pre-eminent’ the works must be considered to be of either national, scientific, historic, or artistic importance (works of art and other objects don’t necessarily have to be of high value to meet this threshold).

If you make a donation to a museum under the Cultural Gifts Scheme, you will receive 30% of the agreed value of the object to set against your income tax or capital gains tax liability, which can be spread over a maximum of five UK tax years. Companies can also take advantage of the scheme and can set 20% of the value against their corporation tax liabilities.

Sotheby’s have worked on some wonderful Cultural Gifts, including Damien Hirst’s Bognor Blue, 2008, which was donated by Hirst’s business manager, and friend Frank Dunphy to Pallant House Gallery in Chichester.

B. Other Charitable Gifts

If your work is not pre-eminent or you prefer to keep things more straightforward, you can make a gift outside of the Cultural Gifts scheme. Gifts of works of art to charities are free of inheritance tax and capital gains tax.

If, after your lifetime, you decide to leave 10% of your net chargeable estate to a charity, the rate of inheritance tax applicable to your estate will be reduced from 40% to 36%. Giving works of art as a gift to museums and galleries in your will or asking your executors to make charitable gifts of artwork in order to meet the 10% threshold could enable your estate to benefit from the reduced rate of tax. To take advantage of this tax treatment, it is essential that the charity is considered a charity for the purposes of UK law. Please contact Forsters if you would like advice on making charitable gifts of artwork either during your lifetime or in your will.

C. Establishing an Art Charity

If you wish to establish a more regular pattern of donations to art-related causes, then it may make sense to set up an art charity (sometimes referred to as art foundations) of your own. In the UK, a charity must have a charitable purpose that is recognised under English law (for example, the advancement of the arts, culture and heritage) and it must provide a public benefit – any private benefit must be incidental. Forsters has known clients to establish charities that provide museums with financial support for the purchase of art; hold an art collection for the public to enjoy; offer financial assistance to artists by creating artist residencies; or which have an educational objective, such as informing the public about the life and work of an important artist.

A UK charity can be structured either as a trust, company or charitable incorporated organisation (CIO), and usually the structure will be informed by the intended purpose of the charity. A trust structure is often more appropriate when a charity is grant-making and a CIO or corporate structure is more suitable for a charity engaged in more complex operational activities and contractual arrangements.

Establishing and maintaining a charity is not a task to be undertaken lightly. It can take time to register a charity with the Charity Commission and rigorous rules and duties need to be complied with on an ongoing basis. That being said, provided that careful thought is given to the operations, governance and funding of the charity, establishing and maintaining a charity can be incredibly rewarding and will enable you to have a greater degree of certainty as to how the charity’s assets are applied. Forsters would be happy to advise on establishing and maintaining a charity with a focus on the arts sector.

D. Gift Aid

You may wish to consider donating money to UK museums and galleries. The Gift Aid scheme allows taxpayers who give cash to charities to claim higher and additional rate tax relief on the gift. The charity can also reclaim tax on the donation at the basic rate, which means that for every £1 donated, the museum can claim 25p.

E. Private Treaty Sales to UK Museums and Galleries

If you are considering selling a work of art, and depending on the calibre of that work, there might be a significant financial advantage to selling the work privately to a qualifying UK museum or institution. If the work is ‘pre-eminent’ (or has previously been conditionally exempted from capital taxes (estate duty, inheritance tax or capital gains tax), then the sale to the museum or institution is exempted from capital taxes and the seller is incentivised by a tax incentive (called the ‘douceur’) which is usually 25% of the tax that would otherwise have been payable.

The beneficial tax treatment is best illustrated in an example. Imagine that you had inherited from a parent a piece of artwork that was considered to be pre-eminent. On your parent’s death, an inheritance tax liability of 40% had arisen on the value of the artwork, but the charge had been deferred due to the availability of the conditional exemption (see Part 4 for more information on this). A couple of years have passed since you inherited the artwork (which has not increased in value) and you have now decided that you would like to sell it. Both a qualifying UK museum and a private buyer offer to purchase the artwork at the market value of £100,000.

If you sell to the private buyer:

Market value of painting£100,000
Deduct inheritance tax at 40%
(the deferred charge will be triggered on the sale)		£40,000
Value of paintings, net inheritance tax£60,000
You receive£60,000

Contrast this with a qualifying sale to the museum:

Market value of painting£100,000
Deduct notional inheritance tax at 40%£40,000
Value of paintings, net notional inheritance tax£60,000
Add tax incentive (25% of total tax liability)£10,000
You receive the special price of£70,000

So, if the sale of the artwork would either give rise to an inheritance tax, estate duty or capital gains tax charge, then a private treaty sale to a qualifying museum or institution is seriously worth considering. The higher the tax (for example, the rate of the estate duty can be as high as 80%) the greater the value of the ‘douceur’.

The museum also benefits from the tax advantage, as it does not have to pay the full market price for the piece but the ‘special price’ instead. This makes the scheme very attractive to acquiring museums. The National Gallery bought Orazio Gentileschi’s masterpiece, The Finding of Moses, through Sotheby’s using this scheme.

F. Acceptance in Lieu (AIL)

Broadly speaking, the AIL scheme allows you to pay some or all of your inheritance tax liability with a ‘pre-eminent’ work. As with private treaty sales (see above), individuals wishing to take advantage of the scheme are incentivised with douceur of 25% of the notional inheritance tax that would have been due. Offers in lieu of tax can be a fantastic way of dealing with large tax liabilities, either following a death or after the sale of conditionally exempt objects.

There is a huge range of items that can be offered in lieu of tax. Sotheby’s have advised on offers ranging from paintings by Van Dyck to a steam locomotive (!) to Gauguin’s last literary manuscript, Avant et après, the latter of which settled £6.5 million worth of tax and is now on display at the Courtauld Gallery.

If you are considering taking advantage of the Cultural Gifts Scheme or AIL, or entering into a Private Treaty Sale, please get in touch with Sotheby’s and Forsters.

We hope you have enjoyed this mini-series and found it helpful. For all art-related queries, please contact Sotheby’s or Forsters.

Please note that this briefing offers general guidance on the acquisition and sale of artwork. The circumstances of each case vary, and this note should not be relied upon in place of specific legal advice.

Felix Hale at Sotheby’s

Felix Hale is a Director in Sotheby’s Tax, Heritage, & UK Museums department (Fiduciary Client Group) and is a member of Sotheby’s UK Chairmen’s Group. He has over a decade’s experience in the industry, having joined Sotheby’s in 2014.

He works with some of the most significant estates and collections in the UK, working with clients on valuations, sales, offers in lieu of tax, and claims for Conditional Exemption. He also frequently represents clients before the government Export Reviewing Committee. Felix is a STEP qualified Trust and Estate Practitioner (TEP) a member of the Professional Advisors to the International Art Market (PAIAM).

If you would like to contact Felix, you can email him on [email protected].

Jo Thompson from Forsters

Jo Thompson is an associate in Forsters’ Private Client team and part of Forsters’ Art and Cultural Property Group. She acts for UK and international clients, advising high net worth individuals, families, landed estates, family offices, trustees and beneficiaries on a range of estate, trust and tax planning matters. Her work includes succession planning for a number of living artists and advising on heritage property matters. She also acts for high net worth individuals and trustees holding significant art collections.

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British dual citizens may be denied entry without UK passport

  • 30 January 2026
  • News

British dual citizens visiting the UK without a British passport could soon face entry restrictions, as new rules come into effect next month.

From 25 February, British nationals travelling from abroad will be required to present either a current UK passport or a certificate of entitlement to verify their status when entering the country. Those unable to provide either document will need to apply for an Electronic Travel Authorisation (ETA) using their other passport (if applicable).

Previously, dual citizens were permitted to travel to the UK on a non-British passport and could, if necessary, prove their citizenship with supporting documents.

The UK Government has stated that digitising the immigration system through ETAs will provide millions of travellers with a more seamless entry experience. ETAs also enhance the government’s ability to prevent individuals who pose a threat from entering the country and allow for a more comprehensive understanding of immigration patterns.

What are the new rules?

The changes form part of the Home Office’s new ETA scheme, which will require visitors from visa-exempt countries to obtain an ETA before travelling to the UK. While British and Irish citizens are exempt from
the ETA requirement, they must now travel on a British or Irish passport or present a certificate of entitlement.

Who is affected?

The new entry requirements apply to all dual citizens who live or travel abroad. However, citizens travelling on or before 24 February may continue to enter the UK using a valid non-British passport. It’s also important to note that these requirements apply if you have been granted British nationality but have not yet obtained a British passport.

Costs

A standard adult British passport currently costs £94.50, while an Irish passport currently costs €75. The cost of applying for a passport from overseas is slightly higher. A certificate of entitlement, which is issued within a foreign passport to confirm the holder’s right to live and work in the UK, currently costs £589.

Why are these changes being introduced?

A House of Commons briefing noted that, although there is no legal obligation for British citizens to travel on a UK passport, pre-departure checks have made it increasingly difficult to enter the UK without one. The Home Office has advised dual nationals for several months to use a British passport when entering the UK. Until now, this guidance was not strictly enforced to allow travellers time to adjust.

How can we help?

Forsters’ Immigration team offers tailored advice and practical solutions for individuals navigating UK immigration requirements. We assist with first-time British passport applications, passport renewals, and applications for a certificate of entitlement.

Contact a member of our team to discuss how these changes may affect you and to receive bespoke guidance for your immigration needs.

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Celebrating a century of the Law of Property Act 1925: A foundation of modern property law

  • 30 January 2026
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Skyscrapers rise into a cloudy night sky, their windows glowing with interior lights. Nearby buildings reflect on the glass surface, creating an urban atmosphere.

The Law of Property Act 1925 (LPA) a foundation of modern property law, marked its centenary in 2025 and came into force in January 1926. It is essential to reflect on its transformative impact on property law in England and Wales. Enacted to simplify and modernise the complexities of property ownership, the LPA laid the groundwork for a more coherent and accessible legal framework. It replaced archaic practices, streamlined conveyancing processes, and established clearer rules governing ownership, rights, and interests in land.

The LPA introduced crucial concepts such as the doctrine of notice, the distinction between legal and equitable interests, and the principle of registered title, which has evolved into the modern land registry system. By promoting the registration of land, the LPA enhanced security and transparency for property transactions, with the aim of reducing the risks of disputes and fraud.

Before the Law of Property Act 1925, property law relied heavily on common law and equity, leading to inconsistencies and overlapping principles. Different forms of ownership, such as freehold and leasehold added further complexities, and the lack of a centralised registry led to uncertainties regarding title and ownership. The case of Leigh v. Jack (1879), was one such example, in which the primary issue centred around a dispute regarding trespass and property rights. The court had to consider the principles of property law, including the doctrine of “exclusive possession” and how it affects claims of ownership. The case highlighted the complexities of property disputes, especially in the absence of clearly defined boundaries and rights, illustrating the inadequacies in pre-1925 property law.

Today, the principles enshrined in the LPA remain highly relevant. As urbanisation and property development continue to accelerate, the need for clear legal frameworks that protect property rights and facilitate transactions is more critical than ever. The LPA’s emphasis on clarity and efficiency has paved the way for innovations in property law, such as electronic conveyancing. While the LPA introduced essential reforms to streamline property transactions and clarify ownership rights; its effectiveness is inherently tied to the efficiency of the broader legal and administrative systems within which it operates. Delays in the Land Registry can significantly hinder the LPA’s intended benefits, leading to prolonged uncertainty in property ownership, disputes, and a lack of confidence in the integrity of property transactions.

It is vital to recognise the Law of Property Act 1925 not just as a historical milestone but as a living framework that continues to shape the landscape of property law in the 21st century.

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Navigating estate administration for US individuals with UK assets

  • 30 January 2026
  • News
A modern building with sleek black columns supports a white structure overlooking a vast, calm ocean under a clear, blue sky.

Key challenges, hidden complexities, and planning strategies for transatlantic estates.

The US and the UK are separated by the vast and tumultuous waters of the Atlantic Ocean. Those with connections to both countries often find themselves rowing against the tide between two very different and complex regimes.

In our Navigating the Atlantic series, we help you understand the issues, avoid the traps, and discover ways to plan ahead. In this instalment, we consider some of the key issues arising for executors of the estates of deceased US persons with UK assets.

Exposure to UK inheritance tax

Early in the process, thought will need to be given to the deceased’s exposure to UK inheritance tax (IHT). This is because an English grant of probate (which will entitle the executors to collect in the deceased’s UK assets) will not be issued by the Probate Registry until HMRC confirms that all IHT due from the estate at that stage has been paid.

The following headline points should be borne in mind:

  • The deceased’s exposure to IHT will depend on whether they were a ‘long term resident’ (LTR) of the UK at the time of death. With some limited exceptions, they will have been LTR if they were UK tax resident in the UK tax year of death and they had been UK tax resident in ten or more of the previous 20 UK tax years:
    • The worldwide estate of a deceased LTR will be exposed to IHT.
    • If the deceased was not an LTR, only their UK assets and non-UK situs assets to the extent that they (directly or indirectly) derive their value from UK residential property will be exposed to IHT.
  • IHT is charged at a flat rate of 40% on death if and to the extent that the value of the taxable estate exceeds the deceased’s available ‘nil rate band’ (NRB) amount of up to £325,000.
  • Assets left to a surviving spouse should generally pass free of IHT. However, there is a limit to this where the deceased was an LTR and the surviving spouse is not (in which case the ‘spouse exemption’ is capped at £325,000 in addition to the available NRB amount).
  • Gifts to individuals made in the seven years prior to death may become chargeable to IHT on death, so the executors will need to ascertain and may need to report historic transfers of value as well as the value of the deceased’s assets at the time of death.
  • Trusts settled by the deceased during lifetime will also need to be considered, as the assets of those trusts may be considered to form part of the deceased’s estate for IHT purposes and additional IHT might be due if the settlor transferred assets to the trusts within seven years of death.
  • Careful consideration will need to be given to the availability of exemptions and reliefs from IHT, which might be available in the US and not the UK, or vice versa.

Reporting and payment of IHT

Unless the estate falls within the narrow category of being an ‘excepted estate’ for IHT purposes (which might be the case, for instance, where the value of the estate situated in the UK only consists of cash or quoted shares or securities not exceeding £150,000), a full IHT account will need to be filed with HMRC within 12 months of the date of death. If the account is not filed within this timeframe, HMRC can issue penalties for non-compliance.

However, payment of IHT falls due sooner; six months from the end of the month of death. HMRC will charge interest at variable rates (currently 7.75%) on any unpaid IHT from that date.

Interaction with exposure to US estate tax

If the deceased was a US citizen or resident (for US estate tax purposes), or if the deceased was a non-US citizen/resident but owned certain types of US assets (including real estate) at the time of death, the estate might also have an exposure to US estate tax. Where there is an exposure to tax under the domestic rules of both the US and the UK, the executors will need to rely on the estate tax treaty between the two countries (“the Treaty”) to avoid double taxation. Broadly speaking, the Treaty provides for a system of credits, by which tax paid in one country can be credited against the liability arising in the other.

Practical challenges where there is dual US-UK exposure

Before HMRC will give up its right to tax assets under the Treaty, the IRS must certify that the relevant assets have been disclosed to them and that any US estate tax falling due has been paid or will be enforced by them. The IRS is currently taking around 18-24 months (or longer) to provide such certifications. This is problematic because, in the meantime, HMRC is within its rights to demand payment of the IHT due on application of the English grant in full, without taking account of any double taxation relief provided for by the Treaty. We are often required to enter into negotiations with HMRC on behalf of our clients to limit the initial assessment of IHT to assets in respect of which the UK has primary taxing rights under the Treaty.

Applying for the English grant of probate

Usually where the deceased’s English assets are covered by a US will and a grant has not yet been issued in the US, the Probate Registry will require an affidavit of foreign law (provided by local counsel from the relevant US state) confirming the validity of the will as a matter of local law and who is entitled to administer the estate. 

This gives rise to an additional administrative hurdle (and associated costs) for the executors that would not arise if there was an English will in place. If primary probate is granted in the US, the Probate Registry will generally accept a court-exemplified copy of the US will to probate in England without an affidavit. However, this option has its own disadvantages, including the inevitable delay in administering the UK assets. For these reasons, we normally recommend that our clients put English wills in place to cover their UK assets. While not essential, this should facilitate the administration of the UK estate on death and reduce the burden on the executors as both administrations can run concurrently.

Executors’ personal liability and the need for professional advice

As a matter of English law, the executors of an estate are responsible for the administration of the estate in accordance with the law. This includes settling any liabilities of the estate and paying any tax that falls due. If there are insufficient funds in the estate to provide for these outgoings because of the estate having been administered incorrectly, the executors could be held personally liable for the unpaid amounts. For that reason, a large proportion of executors of UK estates will seek the advice of specialist solicitors to ensure they adhere to their strict duties and obligations.

Other UK reporting obligations

The executors’ UK reporting obligations do not start and finish with the IHT account. They will also need to be mindful of their UK income tax and capital gains tax reporting obligations, as well as considering whether they are obliged to register the estate with HMRC’s Trust Registration Service (also known as the “TRS”). Advice should be taken to ensure compliance with these requirements.

Conclusion

Administering the estate of a US-connected individual with UK assets requires personal representatives to navigate two separate tax and legal systems, each with its own rules, deadlines and risks. Our US/UK Private Client team advises on every stage of the process from assessing IHT exposure and preparing English probate applications, to managing cross-border tax issues, negotiating with HMRC, and coordinating with US. Whether you are an executor, adviser or family member, we help you steer a clear course through the complexities and ensure the estate is administered efficiently, compliantly and with confidence.

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Forsters appoints Craig Thompson as Head of International

  • 27 January 2026
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Craig Thompson

Forsters is pleased to announce the appointment of Craig Thompson as Head of International, a newly created senior role designed to strengthen further the firm’s global presence and help to deliver a cohesive international strategy.

Craig will be responsible for developing and coordinating Forsters’ strategy outside the UK, ensuring the firm is positioned as a leading law firm in key international markets. His remit includes building relationships with clients and intermediaries globally, representing Forsters at major international conferences, and facilitating collaboration across practice groups to deliver exceptional service to international clients.

Commenting on his appointment, Emily Exton, Managing Partner at Forsters, said:
“Craig’s appointment marks an important step in our strategy to enhance Forsters’ international profile. As our clients increasingly operate across borders, it is vital that we continue to build strong relationships and deliver exceptional advice wherever they need us. Craig’s experience and vision will be invaluable in achieving these goals.”

Craig added:
“I am excited to take on this role and work with colleagues across the firm to enhance Forsters’ international profile. Our clients increasingly require cross-border expertise, and I look forward to ensuring we are well placed to meet those needs.”

Craig brings extensive experience in global markets and a deep understanding of the evolving international legal landscape, which will be instrumental in driving Forsters’ growth strategy.

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On calm waters: Why mediation is the best way to navigate nuptial agreements

  • 26 January 2026
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Three cyclists ride along a paved road at sunset, surrounded by grassy fields and distant hills under a vibrant sky.

Nuptial agreements, whether entered into before marriage (prenuptial agreements) or during marriage (postnuptial agreements), are often misunderstood. They are sometimes seen as unromantic or pessimistic, with the traditional idea of marriage centred around building a long and happy life together. In reality, with the right support, a well-handled nuptial agreement can be one of the most constructive steps a couple takes, particularly when it is negotiated through mediation.

Our family lawyers and mediators regularly help couples approach these conversations with clarity, respect and reassurance.

Mediation: Encouraging collaboration over conflict

Traditional negotiations conducted solely through lawyers can quickly become adversarial, even with the best of intentions. Miscommunications and stilted correspondence sow uncertainty and disquiet. This can feel especially jarring when the couple is engaged, planning a wedding or focused on strengthening an existing marriage.

Mediation offers a different approach. Both partners sit together with a neutral mediator whose role is to guide discussion and help them reach mutually acceptable terms. Our mediators at Forsters regularly help couples through this process, ensuring discussions are balanced, respectful and focused on reaching a workable agreement together. The emphasis is on problem-solving rather than positioning, which is far more consistent with the values of a healthy relationship.

Prenuptial agreements: Getting off to a good start

A well-managed mediation process encourages couples to have frank and often overdue discussions about finances, expectations, career plans, family support and long-term goals. When negotiated through mediation, a prenuptial agreement can actually help set a marriage up for success.

Rather than undermining romance, this process offers structured transparency – “flushing out” potential issues before they become problems. In our experience, couples frequently discover differing assumptions about money, savings, debt, or future responsibilities. Addressing these topics openly, with professional guidance, builds understanding and trust – making a mediated prenup a strong foundation for marriage, not a threat to it.

Postnuptial agreements: A relationship health check

Postnuptial agreements serve a slightly different but equally valuable purpose. Just as life changes, children, career shifts, inheritances, business growth, or periods of financial strain can alter the balance in a relationship. When negotiated in mediation, a postnup can function as a constructive “health check” for a marriage, allowing couples to pause, assess where they now stand, and realign their arrangements in a thoughtful way. Our mediators regularly support clients through this process, creating a space that reflects a couple’s commitment to transparency, fairness, and long-term stability.

Mediation: A tool to promote open and honest communication

Nuptial agreements require full financial disclosure and frank discussions about sensitive issues. Mediation provides a safe, fair and structured environment for these conversations. Each partner has space to express concerns and ask questions, while the mediator ensures discussions remain respectful, focused and productive.

This process can improve communication more broadly, giving couples tools they can use well beyond the agreement itself.

Greater control and more tailored outcomes

In mediation, the couple retains control over the terms of their proposed agreement, allowing for more nuanced and personalised arrangements compared to those typically produced through adversarial negotiation. You will notice a decrease in the number of drafts that are exchanged between solicitors, reduced tensions, and savings on costs.

Couples can thoughtfully address matters such as career sacrifices, the treatment of pre-marital or inherited assets, or how finances will be managed during the marriage. Solutions that have been arrived at together in mediation are often more durable and more reflective of the couple’s shared values.

Cost-effective and emotionally efficient

Mediation is typically quicker and more cost-effective than traditional negotiations. While independent legal advice remains essential for both partners, mediation often reduces overall legal costs and emotional strain by avoiding and also addressing any root causes of conflict.

Whether before or during marriage, nuptial agreements are best seen as tools for clarity and care, and not confrontation.

A mediated prenuptial agreement can help a marriage start on solid ground by addressing important issues early. A mediated postnuptial agreement can act as a valuable health check, helping couples adapt to change while reinforcing trust and partnership.

At Forsters, our family lawyers and mediators, regularly see the power of mediation in action, transforming the nuptial agreement process from a source of anxiety, into an opportunity for growth. When done well, mediation does not just produce the framework for an agreement, it strengthens the relationship it is designed to protect.

If you feel mediation or a nuptial agreement could support your future plans, our Family team is here to support you. Please get in touch with us to find out more.

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Sotheby’s and Forsters – An Owner’s Guide to Art – Part 4

  • 18 January 2026
  • News
A hand mixes paint using a palette knife, hovering over a colourful artist's palette with various paint blobs, in a warm, softly lit workspace.

Last updated: January 2026

Buying and owning art can be one of life’s greatest joys. But while the drive to own art is often fuelled by an emotional connection with a piece or the prospect of holding a lucrative investment, it is important for buyers and owners of art to keep their wits about them, from both a legal and practical perspective.

Felix Hale (Sotheby’s Tax, Heritage and UK Museums Team) and Jo Thompson (Forsters LLP’s Art Group) aim to point those wanting to buy, sell, and hold works of art in the right direction. This five-part mini-series will cover the following key areas:

  1. Acquiring and selling art
  2. Transporting art
  3. Maintaining your collection
  4. Passing on your art collection to the next generation
  5. Art and philanthropy

This piece is aimed primarily at private individuals with a UK tax exposure.

Part 4 -Passing on your art to the next generation

It is important that art is not seen as a “static” asset, even if a work or collection is a long-term hold. You should ensure that you have discussions with your family about the future of your collection. It is important to know whether your family wishes to keep specific artworks or a collection within the family or not. If your intention is to pass artwork to the next generation, make sure you do so in the most tax efficient way possible. Alternatively, if future generations do not want to keep and maintain the artwork or collection, you might decide to sell all or part of it to raise funds for other purposes. Agreeing a strategy in respect of an artwork or collection can help to reduce the chances of a destructive post-death dispute arising.

No family situation or collection is ever quite the same, so it is certainly worth discussing your position with your advisors and putting appropriate long-term planning in place. Forsters would be happy to help with this.

A. Gifts to the next generation

UK capital gains tax (CGT)

If you are a UK resident and do not benefit from the ‘FIG’ exception (i.e. you are subject to CGT on your worldwide income and gains), there may be CGT to pay if your artwork has increased in value between the date on which you acquired the work and the date on which you give it away. Currently, CGT is charged at 18% at the basic rate and 24% at the higher rate.

Certain exemptions from CGT would be available on a gift to your children. For example, so-called ‘wasting assets’, which include clocks, watches and classic cars, are exempt from CGT, as are any individual objects valued at £6,000 or less (but note items in a set will be valued together as one). In addition, each individual has an annual CGT-free allowance, which is currently £3,000 per year.

Any capital gains tax charge arising on the gift would be a “dry” charge, as the transaction would not provide you with any funds from which to pay the tax due, so it is important that you reserve sufficient funds for the purpose of footing the capital gains charge that will be due and reportable in your self-assessment UK tax return in the tax year after you transferred the asset.

A UK resident with tax exposure in other jurisdictions should be mindful of CGT liabilities that may arise in these jurisdictions as a result of the gift and whether any tax treaties between the UK and the jurisdiction in question would protect against the risk of double taxation.

UK inheritance tax (IHT)

You will have an IHT exposure on your worldwide assets if you are a long-term resident in the UK (broadly, you have been UK resident for at least 10 of the previous 20 UK tax years). If you are not a long-term resident in the UK, then you will only be exposed to IHT to the extent that you hold assets that are situated in the UK. For more detail on this, please see Part 1 of this series or contact Forsters for more tailored advice.

If you own an artwork or collection which has a significant IHT exposure, you may wish to contemplate making a lifetime gift of the work to the next generation to help mitigate the IHT exposure of your personal estate.

Outright gifts

Outright gifts to individuals do not attract IHT immediately. A gift of a piece of art to a child, for example, would be a “potentially exempt transfer”, meaning that the gift would be free of IHT, provided that the gift is absolute (in other words, you do not reserve a benefit in the artwork once the gift is made) and you survive seven years from the date on which the gift is made. If you died within this seven-year period, this would trigger a charge to inheritance tax at up to 40% of the value of the painting, subject to the availability of your inheritance tax-free allowance (“nil rate band”) of £325,000. If you survived beyond three years, the rate of IHT on the gift reduces, tapering to 0% if you survived the gift by the full seven years.

You can also make gifts of £3,000 in each tax year, which will be exempt from IHT, even if you die within seven years. You can carry forward one year’s exemption, so if you did not make any gifts last tax year, then in this one, you could give away £6,000 without any IHT consequences.

If you decide to make a gift, we recommend that the gift (including the date on which it is made) is formally recorded by deed. It avoids any argument about whether the recipient has taken physical ownership and the gift is therefore effective and it will be helpful for the executors of your estate to have this sort of documentation when it comes to administering your estate and working out the IHT due.

Gifts to trusts

A lifetime gift to a trust will, in many situations, attract an immediate charge of 20% to the extent that it exceeds the nil rate band. If you were to make a gift to a trust and then die within seven years, an IHT charge of an additional 20% could arise.

If you decide to make any lifetime gifts or transfers into trust, you may wish to consider obtaining insurance to cover the risk of the potential IHT exposure while the seven-year clock is ticking. This might be particularly important when it comes to making outright gifts to individuals, who will be primarily liable for meeting the IHT charge.

Rental agreements

To ensure that the seven-year clock starts ticking for IHT purposes, it is essential that the gift is absolute. However (and as is often the case), you may wish to keep enjoying those works of art on the walls (or your collection of furniture, books, ceramics, or anything else!). If so, you can consider entering into a gift and leaseback arrangement whereby you would make a gift of artwork to the next generation and then lease the artwork back from the recipient of the gift at a commercial rate.

Rental arrangements can be an effective way of mitigating IHT and enabling you to continue to enjoy the item or work in question, but before one is entered into, it is important to consider the costs involved in valuing the objects and negotiating the rents. The rental arrangements also need to be in place consistently for seven years before the donor’s death and continue to reflect a market rent at any point in time during that period in order to eliminate completely any exposure to IHT. Clearly, then, the amount of rent that would need to be paid under a rental agreement should be compared against the IHT exposure.

Where artwork is held in trust and enjoyed by a beneficiary of the trust, then in certain circumstances, rental agreements can help to ensure that adverse tax implications do not arise as a result of the benefit conferred on the beneficiary. For further guidance on this, please get in touch with Forsters, who can liaise with Sotheby’s regarding valuations and negotiation of a rental figure (either on behalf of the owner or the borrower).

B. Artwork passing on death

Succession

The most effective way to ensure that your artwork ends up in the right place after your death is to put a will in place that governs the succession of your artwork (and, ideally, the rest of your personal estate).

Those with assets in different jurisdictions should ensure that any wills address the succession of those assets according to the relevant local laws. Forsters would be happy to advise on this.

Tax considerations

As mentioned above, if you are a long-term resident in the UK, you will be exposed to UK inheritance tax  on your worldwide assets at 40% on your death, subject to the availability of your inheritance tax free allowance of £325,000 and applicable exemptions, such as the spouse exemption. If you are not a long-term resident in the UK, but die owning assets in the UK, these assets will be subject to inheritance tax in the same way.

Conditional Exemption

In order to mitigate your inheritance tax liability, you may wish to take advantage of a tax incentive that exists in the UK for owners of important works of art. It is designed to indefinitely defer tax arising on ‘pre-eminent’ works in return for allowing a degree of public access to them.

It is hard to overstate the importance of this scheme, which has been going strong since 1896 and is one of the main reasons why the UK has so many amazing objects and collections still in private hands but on public display. The scheme allows owners of ‘pre-eminent’ works of art and other objects (including land and buildings) to pass them down to the next generation and retain them in private ownership by conditionally exempting them from inheritance tax. In exchange, the owner agrees to grant public access to the object. Public access can be given to an object either by putting it on display in a house that is open to the public or placing it on loan at a UK museum. HMRC usually expect the object to be on public display for at least 28 days per year (25 days in Scotland) unless for example you are exempting archives or other manuscript material where public access can be given ‘by appointment’ only.

To qualify as ‘pre-eminent’ the object must be considered of either national, scientific, historic, or artistic importance. Works of art and other objects don’t necessarily have to be of high value to meet this threshold. Exemption can also be claimed on groups of items or sometimes an entire collection. In certain cases, it is possible to exempt a collection that might not necessarily meet the pre-eminence threshold on the basis of their association with a particular historic building.

If the owner no longer wants to put the object on public display or would like to sell the work, then the tax that would have been due becomes payable. If owners are contemplating selling an exempt object they should consider a ‘Private Treaty Sale’ to a qualifying UK museum as there can be significant tax advantages in doing so, as outlined in Part 5 (coming soon).

How we can help

For further guidance on your UK tax status, or on the potential UK tax implications of making a gift or leaving a legacy in your will to the next generation, please get in touch with Forsters.

Sotheby’s is delighted to discuss passing on your art collection to the next generation. Sotheby’s frequently assist owners with claims for Conditional Exemptions ranging from a single painting to large country house collections, advising on the likelihood of the work meeting the threshold required for exemption and providing supporting evidence for this. Forsters can advise on the associated tax reporting.

In the next and final part of the mini-series, we will be looking at philanthropic initiatives relating to art, as well as the tax benefits that incentivise owners to take advantage of these.

PART 5


Please note that this briefing offers general guidance on the transportation of artwork. The circumstances of each case vary, and this note should not be relied upon in place of specific legal advice.

Felix Hale at Sotheby’s

Felix Hale is a Director in Sotheby’s Tax, Heritage, & UK Museums department (Fiduciary Client Group) and is a member of Sotheby’s UK Chairmen’s Group. He has over a decade’s experience in the industry, having joined Sotheby’s in 2014.

He works with some of the most significant estates and collections in the UK, working with clients on valuations, sales, offers in lieu of tax, and claims for Conditional Exemption. He also frequently represents clients before the government Export Reviewing Committee. Felix is a STEP qualified Trust and Estate Practitioner (TEP) a member of the Professional Advisors to the International Art Market (PAIAM).

If you would like to contact Felix, you can email him on [email protected].

Jo Thompson from Forsters

Jo Thompson is an associate in Forsters’ Private Client team and part of Forsters’ Art and Cultural Property Group. She acts for UK and international clients, advising high net worth individuals, families, landed estates, family offices, trustees and beneficiaries on a range of estate, trust and tax planning matters. Her work includes succession planning for a number of living artists and advising on heritage property matters. She also acts for high net worth individuals and trustees holding significant art collections.

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Minor defaults, major consequences? Supreme Court says no in JCT termination case

  • 16 January 2026
  • News
Terraced houses in brick stand in a row, featuring black doors and white-framed windows. A street lamp with hanging flowers sits in front, and a sign reads "Shouldham Street W1".

On 15 January, the Supreme Court handed down its decision in Providence Building Services Limited v Hexagon Housing Association Limited (UKSC/2024/0130). The case turned on an important technical point in the JCT Design and Build Contract (2016 edition): does a contractor need to have gained the right to terminate under clause 8.9.3 before it can rely on clause 8.9.4 to bring the contract to an end?

The Supreme Court unanimously held that yes, it does. In other words, a contractor cannot use clause 8.9.4 unless an earlier “specified default” continued without being put right within the time period specified in clause 8.9.3.

Why this matters

The judgment is significant because:

  • It clarifies how the termination clauses in the standard form JCT contracts operate in both the 2016 and the updated 2024 editions, which are widely used.
  • It gives wider guidance on how contractual termination rights should be read and applied, particularly in the context of standard form contracts — useful for anyone involved in negotiating, drafting, or interpreting contracts.

The relevant clause

The relevant parts of clause 8.9 in the contract provided as follows (the parties’ bespoke amendments are shown underlined):

Default by Employer

8.9 .1 If the Employer:

.1 does not pay by the final date for payment the amount due to the Contractor in accordance with clause 4.9 and/or any VAT properly chargeable on that amount…

…

the Contractor may give to the Employer a notice specifying the default or defaults (a ‘specified’ default or defaults).

…

8.9.3 If a specified default or a specified suspension event continues for 28 days from the receipt of notice under clause 8.9.1 or 8.9.2, the Contractor may on, or within 21 days from, the expiry of that 28 day period by a further notice to the Employer terminate the Contractor’s employment under this Contract.

8.9.4 If the Contractor for any reason does not give the further notice referred to in clause 8.9.3, but (whether previously repeated or not):

.1 the Employer repeats a specified default;

…

then, upon or within 28 days after such repetition, the Contractor may by notice to the Employer terminate the Contractor’s employment under this Contract.

The facts

Providence Building Service Limited (“Providence”) had been appointed by Hexagon Housing Association Limited (“Hexagon”) as the building contractor under a JCT Design and Build 2016 contract. Although the parties had made some bespoke amendments, none of those changes affected how the termination clauses were interpreted in this case.

During the works, the following series of events unfolded, which ultimately led the parties to the Supreme Court:

  • On 25 November 2022, the employer’s agent issued Payment Notice 27 for £260,000 which was to be paid on or before 15 December 2022;
  • On 16 December 2022, as payment had not been made, Providence issued a notice of specified default under clause 8.9.1;
  • On 29 December 2022, payment was made in full, albeit 14 days late;
  • On 28 April 2023, the employer’s agent issued Payment Notice 32 for £360,000 which was to be paid on or before 17 May 2023;
  • On 18 May 2023, as payment had not been made, Providence issued a notice of termination pursuant to clause 8.4.3;
  • On 23 May 2023, Hexagon made payment, contesting the validity of the termination.

Hexagon’s arguments

Hexagon’s position was that a contractor cannot jump straight to issuing a termination notice under clause 8.9.4 simply because the employer has repeated the same type of default (in this case, late payment). Instead, Hexagon argued that the contractor must first have acquired the right to terminate under clause 8.9.3, and that right only arises if the specified default has continued unremedied for the full 28‑day period.

Applied to the facts here, Hexagon said that Providence could not rely on the late May payment as grounds to terminate immediately under clause 8.9.4. Although the May default was a repeat of late payment, like the earlier December default for which a specified default notice had been served, the December payment was made within the 28‑day cure period. Because that earlier default was remedied in time, Providence never obtained a clause 8.9.3 right to terminate. Without that accrued right, said Hexagon, Providence could not terminate under clause 8.9.4.

In Hexagon’s view, Providence should have waited 28 days from the date the May payment became overdue before taking any termination step. Only if the May default had then still not been remedied could Providence have validly terminated. The outcome would have been entirely different if the December payment had not been made within 28 days — in that scenario, on Hexagon’s case, Providence’s right to terminate under clause 8.9.3 would have accrued, enabling immediate termination under clause 8.9.4 when the May payment was also paid late.

Providence’s arguments

In contrast, Providence argued that where the employer repeats the same type of default — and a specified default notice has already been served for that earlier breach — the contractor does not need to have first gained the right to terminate under clause 8.9.3 before it can terminate under clause 8.9.4. On that interpretation, the contractor can move straight to clause 8.9.4 if the same default happens again.

Providence argued that this meant it was entitled to terminate in May. The May late payment was a repeat of the earlier late payment in December, for which Providence had already served a specified default notice. Because of that earlier notice, Providence said it did not need to wait a further 28 days to see whether Hexagon would fix the May default. It could terminate immediately once the May payment fell due and was not paid — which is exactly what it did, serving its termination notice under clause 8.9.4 the day after payment should have been received.

Whereas the High Court decided the argument in favour of Hexagon, the Court of Appeal disagreed, overturning the decision of the High Court in favour of Providence and prompting Hexagon’s appeal to the Supreme Court.

Supreme Court’s decision

Noting the public importance of the matter given the prevalence of JCT forms, the Supreme Court overturned the decision of the Court of Appeal.

The Supreme Court stated that the modern approach in English law to contractual interpretation is to ascertain the meaning of the words used by applying an objective and contextual approach.

As the contract in question was a standard form widely used across the construction industry, the Supreme Court held that the relevant background included not only the text of the 2016 JCT Design and Build Contract but also earlier case law, and established industry practice, on similar clauses in previous editions. As Lord Burrows explained, when parties choose a widely used standard form, they generally expect it to operate consistently for all who use it.

The Supreme Court was of the view that clause 8.9.4 was “parasitic” on clause 8.9.3 because the opening words of clause 8.9.4 (“If the Contractor for any reason does not give the further notice referred to in clause 8.9.3…”)refer back to 8.9.3. If it were intended to operate independently, there would be no need to refer back to clause 8.9.3.

Against that background, Hexagon’s argument aligned most naturally with both the wording and the commercial context of the contract: the contractor should only be able to terminate for a repeated specified default if the employer failed to cure the earlier default within the cure period. That interpretation, the Supreme Court said, produced a more rational and less extreme outcome than the approach argued by Providence.

By way of illustration, Lord Burrows offered an example: suppose an employer makes two late payments, each only one day late. Under Providence’s interpretation, the contractor could nevertheless terminate the entire contract. The Supreme Court considered that disproportionate, “a sledgehammer to crack a nut”.

The Supreme Court also criticised the Court of Appeal’s attempt to create symmetry between the employer’s termination provisions in clause 8.4 and the contractor’s termination provisions in clause 8.9. The Supreme Court said that was misguided as the two sets of provisions are drafted differently, govern different rights and obligations, and are not required to mirror each other.

A sensible outcome

The Supreme Court’s decision looks to be a victory for rationality and common sense, albeit, from some viewpoints, a slight divergence from giving the words of the contract primary importance. Employers, in particular, will be reassured as the decision confirms that the repetition of short‑lived breaches, such as slightly delayed payment, will not, by themselves, give contractors an immediate right to terminate the contract.

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Biodiversity Net Gain can help boost economic resilience – weakening the policy would show a lack of ambition

  • 14 January 2026
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Rolling green hills are adorned with scattered trees and stone walls, creating a peaceful rural landscape. In the distance, soft hills rise under a clear, bright sky.

Government proposals to exempt small sites from Biodiversity Net Gain (BNG) rules signals a disappointing lack of ambition and understanding of how the sectors have already mobilised to support this new market.

Shortly before Christmas, the government published a consultation on a revamped National Planning Policy Framework, setting out proposals aimed at accelerating the delivery of hundreds of thousands of new homes nationwide.

Among the proposals are plans to roll back Biodiversity Net Gain (BNG) commitments to unlock smaller housing sites. But the exemption of small sites (i.e. less than 0.2ha) from BNG obligations signals a disappointing lack of ambition and understanding of how the sectors have already mobilised to apply, satisfy and deliver BNG requirements.

There is strong signalling here suggesting ‘nature is a hindrance and a blocker to development’. Yet scratch the surface, and that is far from the full picture.

BNG has, in my view, been an inspired catalyst for driving the creation of an entirely new market. And in the main, it works. The arrival of BNG for NSIPs (Nationally Significant Infrastructure Projects) from May 2026 is anticipated to drive demand even further.

But there is a higher purpose behind BNG which is often ignored in the desperation to ‘get around the red tape’, which is one of business, societal and economic resilience. Well-developed BNG and nature projects at scale have incredible scope to improve nature resilience, reduce flooding, reduce drought, improve water and air quality, and avoid the associated costs that come with all of these. It can be much more than replacing lost biodiversity and adding 10 per cent.

The planning system has long been a problem and pointing the finger at BNG and nature more widely has much more severe ramifications for the natural capital sector. Whilst the costs around assessing and creating BNG presents costs viability issues in some cases, particularly for small sites, the makeup of these costs often includes set up costs and professional fees, not just the actual costs of onsite delivery or the acquisition of offsite BNG credits.

A better solution would have been a moratorium for small sites to allow the market to evolve and for fractional BNG units to become more cost effective and more widely available. This, combined with a relaxation of the spatial risk multiplier rules for small sites, could have avoided a blanket exemption.
There is no doubt that landowners seeking to deliver smaller scale developments and housebuilders, particularly rural and urban fringe respectively, will be hugely relieved by the change and can likely move forward with one less hurdle to overcome.

But the move has wider ramifications, and has not helped confidence in nature markets. I say this in part from the perspective of a lawyer navigating these markets, advising clients exploring opportunities and structuring those deals. The first question that we ask our clients entering into BNG or any scheme is: what is the demand and who are the buyers?

Business resilience is the real key to nature markets, over and above BNG alone and responsible business agendas. Well advanced businesses of all natures are looking to the future and seeking to understand how nature resilience affects their business and profitability. The World Economic Forum (WEF) estimates that a global transition to a nature-positive economy could generate $10.1tr in annual business value and create 395 million jobs by 2030 through new business models, resource efficiency, and cost reductions.
Instead, with this latest move, the government has signalled that nature and supporting BNG measures are a hindrance.

Take a law firm as an example. Business resilience can mean infrastructure that works, happy, healthy and enthusiastic staff, and a mandate to take carbon footprints and nature impacts seriously. This commitment not only builds in staffing and supply chain resilience, but also helps us to support more natural capital clients and to provide more effective legal structures to schemes, which in turn, make them more economically viable and deliverable.

Even if the Taskforce on Nature-related Financial Disclosures (TNFD) never becomes mandatory, as the wider business community recognises the need for nature resilience, the government’s row back on small sites will only be a minor setback. Those who have invested heavily, financially and practicably, in nature markets are more likely to prosper.

To understand the importance of BNG as a concept, we should look to the interaction between BNG and other streams of project income, such as voluntary markets and landscape recovery projects. The certainty around the demand side of BNG through the planning system is often built into more ambitious projects to justify capital expenditure with guaranteed income from BNG, the wider aim being to generate revenue from the sale of voluntary credits for nature benefits into to the wider business community.

This is what demonstrates the governments wider lack of understanding of the intricacies of markets. Markets will always rely on creative thinking and real business demand from the private sector to keep growing ambitiously. But there is a role for government in stabilising markets and we can only hope that the wider consultation due in spring 2026 will do just that.

To start, policy changes that impact demand are unhelpful and deliver only regulatory anxiety. The consultation should look to introduce demand smoothing measures, without over-interfering. For nature providers, it should also look to enable some demand guarantee to bridge the gap between supply creation and unit purchase. Long term uncertainty around scheme failure and enforcement is an issue that plagues all nature projects and warrants standardisation. The consultation should add clarity around enforcement expectations. The consultation also needs to clarify rules around BNG compatibility with other schemes, particularly given the role of BNG as an anchor project.

All of the improvements that can be delivered around established BNG markets will help to shape the future of wider markets. Better signalling around the true reason behind BNG and the longer-term benefits of it is key to shifting perceptions. This in turn will be key to businesses identifying what nature-based resilience means for them and where taking action will impact profitability.

This article was originally published by BusinessGreen on 9 January 2026.

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Forsters’ Commercial Dispute Resolution team recognised in The Lawyer’s top 20 cases of 2026

  • 14 January 2026
  • News

The Lawyer’s list of the Top 20 cases to be heard in the Courts of England and Wales in 2026 features Hipgnosis Music Limited (In Liquidation) v Merck Mercuriadis & Ors in which Forsters acts for the Claimant.

The Forsters team is led by Partner and Head of Disputes, Benedict Walton, with support from Senior Associate Edward Richards and Associates Nicholas Owen, Frances Snowball and Saffy Sall. Forsters instruct Edward Davies KC and Anna Scharnetzky (both of Erskine Chambers). A four-and-a-half-week trial is expected to begin in late February 2026.

To find out more about our expertise, please visit our Commercial Dispute Resolution page, or contact a member of the team.

View the full The Lawyer feature: The Top 20 cases of 2026.

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Moving fast and finding safety: Understanding protective orders in domestic abuse cases

  • 13 January 2026
  • News
Three cyclists ride along a paved road at sunset, surrounded by grassy fields and distant hills under a vibrant sky.

Domestic abuse remains a serious issue in England and Wales. The latest Office for National Statistics (ONS) data shows that domestic abuse-related offences accounted for more than 15% of all crimes recorded by police in the last year, affecting a staggering 3.8 million people (7.8% of the population) aged 16 years and over.

What constitutes domestic abuse?

Domestic abuse is not limited to physical violence and threats, and includes:

  • Physical or sexual abuse;
  • Violent or threatening behaviour;
  • Controlling or coercive behaviour;
  • Economic abuse affecting a person’s ability to manage their money;
  • Psychological or emotional abuse; and
  • Female genital mutilation (FGM).

How can solicitors act to help protect victims of domestic abuse?

Alongside reporting matters to the police, a solicitor can help a client to seek protection from the court by applying for two types of protective court orders: non-molestation orders (“NMOs”) and occupation orders (“OOs”). These orders work to prevent harassment and/or to help remove a victim from an abusive situation. Both orders provide temporary protection to a victim whilst other arrangements are made to secure the safety of the victim and any children.

Case study

Helping to protect a client who was a victim of domestic abuse

Forsters recently acted on an emergency basis to secure both an NMO and an OO for a client and her three young children. The client and her children were being subjected to a range of distressing physical, emotional and financial abuse, as well as coercive control. We were granted an urgent NMO without notice, which provided our client and the children with immediate protection. At a later hearing, we secured the OO which safeguarded our client’s right to remain in the family home and excluded the other party. The judge commended the strength of our statement and the quality of the application – a testament to the expertise of our Family team.

Who can apply for a non-molestation or occupation order?

You can apply for an NMO or an OO if you have (or previously had) a relationship with the person you need protection from, including:

  • Spouses or civil partners;
  • Cohabitants;
  • Relatives;
  • Parents of a child together;
  • Those engaged or formerly engaged to marry;
  • Individuals in an intimate relationship of significant duration; and
  • Parties involved in the same family proceedings.

For an occupation order, you must also have a legal right to occupy the home (as a joint or sole tenant or owner), or you have lived with or have been married to a partner who holds that right. If you are unsure of your rights, you can contact us for clarification.

What is a non-molestation order (NMO)?

An NMO is a court order that prohibits someone (the “perpetrator”) from molesting you or a relevant child (section 42, Family Law Act 1996). Although “molestation” is not defined in law, courts interpret it broadly to include violence, harassment, threats and unwanted contact; this behaviour can be direct, such as physical violence, or indirect, through social media posts or using third parties to communicate.

NMOs can also be relied upon to prevent someone from entering certain areas, such as your home, particular rooms in your home or your workplace.

What does the court consider on an application for an NMO?

The court reviews all evidence of the perpetrator’s behaviour and the effect that it has had on the victim and/or any children to decide whether protection is needed. In one case, the perpetrator hung degrading posters about the victim outside the school where she worked (Horner v Horner [1982] 2 WLR 914). Other examples include sending abusive messages, acts and threats of violence and searching through someone’s possessions without their permission.

How long does an NMO last?

Typically, an NMO lasts between six and 12 months, but can be extended with permission of the court. In rare circumstances the NMO can remain in force until the court makes a further order; examples would include if there is a continuing threat to the victim or any children, or if the perpetrator persists in abusive behaviour towards the victim despite an order being in place.

Breaching an NMO: what happens next?

Breaching an NMO is a criminal offence which is punishable by up to five years’ imprisonment or contempt of court (section 42A, Family Law Act 1996). A contempt of court can be enforced through civil proceedings by applying for a committal order. In practice, criminal proceedings usually take priority over civil proceedings on public policy grounds. If the Crown Prosecution Service decides not to prosecute, enforcement can still take place via committal proceedings.

A breach of an NMO order is a criminal offence, and therefore the police can step in to prevent a breach whilst it is happening or if they have reason to believe it has happened.

A perpetrator cannot face both civil punishment for contempt and a criminal conviction for the same behaviour.

What is an occupation order?

An OO determines who can live in a property, and it can exclude someone from living in the home. An OO can also be used to address practical matters, such as who pays the rent or mortgage (sections 33, 35-38, Family Law Act 1996).

What does the court consider for an OO?

The court applies a “balance of harm test”, weighing the harm to the victim and any children if the OO is not made, against the harm to the perpetrator of making the order. This is a high threshold because of the gravity of excluding someone from their home. Typically, the harm to a perpetrator would be that they have limited financial resources to find an alternative place to live. The court must make an order if it appears that the victim or any relevant child is likely to suffer significant harm attributable to the perpetrator’s conduct if an order is not made (section 33(7), FLA 1996).

The court also considers:

  • The housing needs and housing resources of both parties;
  • The financial resources available;
  • The impact on the health, safety and wellbeing of the parties and any children; and
  • The conduct of the parties.

If the victim is not legally entitled to occupy the home but is the perpetrator’s spouse or former spouse, the court may have regard to some additional considerations. These include:

  • The length of time that has elapsed since the parties last lived together;
  • The length of time that has elapsed since the marriage was formally ended; and
  • Any ongoing financial remedy applications or disputes regarding the ownership of the property (section 35(6), FLA 1996).

If the victim is not legally entitled to occupy the home but is living with or previously lived with the perpetrator, the court may also have regard to:

  • The nature and length of the parties’ relationship;
  • The length of time that has elapsed since the parties’ relationship ended;
  • Any relevant children; and
  • Whether there are any ongoing applications in relation to maintenance under Schedule 1 to the Children Act 1989 (section 36(6), FLA 1996).

How long does the OO order last?

The duration of OOs depends on which section of the FLA 1996 was relied on to make the application.

  • Orders under section 33 can be made for a specified period which is defined by the occurrence of a specific event or until a further order is made;
  • Orders made under sections 35 and 37 can be made for a maximum of six months but can be renewed more than once; and
  • Orders under sections 36 and 38 can be made for a maximum of six months but may only be renewed once.

In practice, it is unlikely for an occupation order to be made for longer than six months due to the impact this severe order has on the perpetrator.

Breaching an OO: what happens next?

Unlike NMOs, OOs do not automatically carry a power of arrest. The court can attach a power of arrest if there is evidence of violence or threats, but without this power you must apply for a warrant of arrest if the order is breached. The court can add a power of arrest to certain sections of an order, and if the perpetrator breaches those sections of the order, they can be arrested without the need for a warrant. The victim should report any breach where there is a power of arrest to the police.

Applications made without notice

In urgent cases, the court can grant a “without notice” order, which means the perpetrator is not informed before the order is made. Such orders are more commonly granted for NMOs, as the more severe consequences of an OO generally justify notifying the perpetrator in advance.

In November 2025, the President of the Family Division, Sir Andrew McFarlane, announced new practice guidance for protective orders that will become effective this week (week commencing 12 January 2026). Among other things, this guidance reminds the courts to consider the broad definition of domestic abuse set out at the start of this article. The guidance also sets out that, when the court receives a without notice application, it can:

  • Make the without notice order without a hearing if there is sufficient evidence and it is just and convenient, and then list a second hearing within 28 days; or
  • Refuse the application with reasons and list a hearing with notice within 21 days, allowing the victim to request reconsideration within two working days before notifying the other party; or
  • List a without notice hearing within one working day so that the victim can give evidence before a decision is made.

NMO vs OO: which order – or both?

  • Apply for an NMO if you are experiencing domestic abuse and you need protection from harm.
  • Apply for an OO if you need to exclude someone from your home for safety reasons.

Because OOs have a higher threshold, many victims seek both orders. This means that you may have the protection of the NMO if the OO is refused, and an NMO can often be granted urgently whereas this is less common for OOs.

How can Forsters help?

Our Family team has extensive experience in securing injunctions for clients. We understand the urgency and sensitivity of these situations, and we will act swiftly and decisively to guide you through the process with care and compassion to ensure you and your family receive the protection you need.

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New Year Reflections: Why procedural precision matters in litigation

  • 13 January 2026
  • News

A new year often prompts us to turn over a new leaf, tie up loose ends and ensure our homes are in order. For litigators, this is also an opportune moment to reflect on whether our procedural “house” is equally well maintained, including across current and prospective litigation processes. Recent Court of Appeal decisions serve as a timely reminder that overlooking procedural details can have serious – and often costly – consequences.

A cautionary tale on service out of the jurisdiction 

In Robertson v Google LLC[2025] EWCA Civ 1262, the claimant – Colin Robertson, a YouTuber known as “Millennial Woes” – failed to effect valid service of his claim form on the US-based defendant within the applicable six months. He had not filed Form N510 with the court or provided it with the claim form (a requirement for service out of the jurisdiction) and only did so later with an application for relief from sanctions. The Court of Appeal held that the requirement for Form N510 is mandatory. Civil Procedure Rule (CPR) 6.34 did not contemplate retrospective validation of invalid or defective service and the wording strongly suggested that the court’s permission to serve without filing N510 has to be obtained before valid service can be effected. CPR 7.6 governed extensions of time for serving a claim form, and it was “illegitimate” to use CPR 3.9 (relief from sanctions) to bypass it. This judgment highlights how compliance with mandatory service requirements is critical.

Missed service deadlines can spell serious consequences

Not long after, the Court of Appeal revisited the question of invalidly served claim forms inBellway Homes Ltd v Occupiers of Samuel Garside House [2025] EWCA Civ 1347. The claimant missed the 4pm service deadline in a court order. Attempts to serve by fax and DX failed: the fax did not transmit, and DX collected documents from the solicitor’s reception after office hours. The court found that the claimants did not show that, as a matter of fact, they took the necessary steps for service by 4pm. Even if that were wrong, the claimants had not complied with CPR 7.5 as a matter of law as each of the CPR 7.5 methods of service constitutes a “positive” and “irrevocable” act. Leaving documents at reception for later collection by a DX provider did not qualify. Applying the principles from the authorities, the court found the case could not be distinguished from Robertson v Google and so the failure to validly serve the claim form, where no extension had been granted, meant the defendant was not the subject of the court’s jurisdiction. Therefore, the defendant was not required to take any steps in proceedings to file an acknowledgment of service, or apply under CPR 11 to challenge the court’s jurisdiction. Another reminder that it is essential to keep a close eye on the procedural rules as a case progresses.

What this means for in-house teams

With commercial litigation, the focus can often be on the bigger picture, but these judgments remind us that cases can be won or lost on procedure. For in-house lawyers, practical things to consider are:

  • Plan ahead for service: consider diarising key dates and confirming with external counsel the intended method of service in advance (where possible).
  • Don’t assume you will get extra time: procedural rules on service are strict and extensions must be sought under the relevant rules.
  • Educate your internal teams: brief your internal business clients on the importance of timely instructions for litigation steps and the potential risks with late instructions.

To learn more about the scope of Forsters’ Commercial Dispute Resolution expertise and how we can help you, click here.

Caroline Harbord
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Hiring 101 for start-ups: key legal considerations

  • 12 January 2026
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Curved glass-fronted building reflects light, creating smooth waves across its surface, set against a clear blue sky.

With any start-up, you’ll likely want to build a diverse and skilled team to bring your vision to life and to complement your own skill set as soon as you can.  This article explores some of the key points you’ll need think about as a first-time employer, to ensure that you’re legally compliant and that your business is protected.

1. Classification risk – employee, worker or consultant?

Whether someone is your employee is a matter of substance.  You may hear this called the ‘classification risk’.  In the UK, there are “employees”, “workers” and “consultants”, and the employment rights and tax treatment that attach to each varies.  Establishing which category an individual falls into can be tricky and consideration should be given to various factors.  For example, whether an individual is required to perform work personally, how much control you exert over them and whether they can provide a substitute in their place, will all go towards determining that individual’s employment status.  Generally speaking, the less freedom an individual has over how and when they work, the more likely it is that they’ll be employees.

Investors will be keen to see that you’re managing this risk and that you’re taking it seriously, as it goes towards some fundamental matters, such as accounting for tax, enforceability of terms and ownership of work product. (Generally speaking, IP created by an employee in the course of their employment belongs to the employer, whereas the contract will determine the position for contractors.)

2. Your obligations before you hire

Before you even hire an employee, you must carry out certain actions.  For example, you’ll need to ensure that the person you’re hiring has the right to work in the UK, you’ll need to consider your obligations to HMRC (including being established as an employer for payroll purposes) and you’ll need to ensure that you have minimum pension arrangements set up.  It’s also important that you have employers’ liability insurance in place; it’s a criminal offence not to.  Many new businesses outsource these tasks to payroll agents or accountants.

3. Employment contracts and policies

You’ll need to provide the new employee with an employment contract and ensure you have appropriate employment policies in place.  These are required for compliance and “best practice” purposes, but they also help to protect the business.  As such, you’ll need to consider IP, confidentiality and restrictive covenants (such as a non-compete provision). Not having these arrangements clearly documented can leave a business exposed, especially if an employee decides to leave to join a competitor; in such a case, you might have limited recourse against them if they try to damage your business.  If you’re hiring a contractor, rather than an employee, you should put in place a consultancy agreement.

4. Understanding statutory employment rights

If someone is an employee, they’ll have the benefit of employment statutory rights.  These are voluminous and include, for example, protections/rights in respect of dismissal, discrimination, sick pay, annual leave and family leave.  Our employment team continue to monitor developments around employment rights, sign up to our employment law newsletter. 

5. Additional requirements for international hires

If you’re looking at international hires, you’ll need to jump a few extra hurdles.  For example, you’ll need to consider the tax, immigration and regulatory issues of operating in another country, which employment laws apply and any data protection implications (especially where personal data is being transferred to another country). You may explore employer of record arrangements, but if doing so you’ll need to check these carefully. In particular, you should consider whether the company has IP ownership and recourse against the individual where appropriate, and whether there are any issues with such arrangements from a local law perspective.

6. Incentivising your employees

In terms of incentivisation, it’s typical for start-ups to use a mixture of cash and equity-based compensation (a 10% option pool isn’t uncommon). Read more about the options available. 

7. Founder arrangements

Finally, it’s always worth sense checking your founder arrangements.  Are these papered, and should they be? It’s sensible to cover off that IP is owned by the company (rather than by the creator). You may also wish to have provisions in place covering what will happen if a founder calls it quits, and how to deal with confidentiality.  That said, you should be conscious that investors will have their own requirements and so you’ll need to balance the possibility of replacing documents with how much time to spend on this at the outset.

Conclusion

Building your team, by hiring employees, is an exciting milestone for a start-up but it comes with legal and practical responsibilities that can’t be overlooked. From classification risk to contracts, compliance is key to protecting your business and reassuring investors.

At Forsters, our Corporate, Employment, and Immigration teams work together to provide start-ups and growing businesses with tailored advice on everything from structuring founder arrangements to managing international hires. Get in touch to find our how our expert guidance can help protect and grow your business.

This note reflects the law as at 12 December 2025. The circumstances of each case vary and this note should not be relied upon in place of specific legal advice.

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Sotheby’s and Forsters – An Owner’s Guide to Art – Part 3

  • 11 January 2026
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A hand mixes paint using a palette knife, hovering over a colourful artist's palette with various paint blobs, in a warm, softly lit workspace.

Last updated: January 2026

Buying and owning art can be one of life’s greatest joys. But while the drive to own art is often fuelled by an emotional connection with a piece or the prospect of holding a lucrative investment, it is important for buyers and owners of art to keep their wits about them, from both a legal and practical perspective.

Felix Hale (Sotheby’s Tax, Heritage and UK Museums Team) and Jo Thompson (Forsters LLP’s Art Group) aim to point those wanting to buy, sell, and hold works of art in the right direction. This five-part mini-series will cover the following key areas:

  1. Acquiring and selling art
  2. Transporting art
  3. Maintaining your collection
  4. Passing on your art collection to the next generation
  5. Art and philanthropy

Part 3 – Maintaining Your Collection

This part of the mini-series is designed to equip you with practical tips on how to maintain, insure, and keep track of the works of art in your collection.

A. Insurance

Insurance values should be reviewed regularly to avoid either underinsuring your collection or paying premiums that are too high. Generally, we recommend updating insurance values at least every five years (or more regularly depending on your collection). Depending on the nature of your collection, you may want to consider a specialist art insurer.

If you would like to discuss a valuation, please get in touch with Sotheby’s.

B. Inventories

If you have a large collection, you might want to consider managing it using collection management software such as ‘Collector Systems’. This is a useful way to monitor your collection as it enables you to store information regarding the purchase (invoices etc.), insurance and valuations, as well as up-to-date records on the condition and maintenance of works. Reviewing the collection every few years is important to keep track of works that are damaged, lost, or stolen, especially if any of the works are conditionally exempt from inheritance tax (where their loss would trigger a substantial charge).

C. Environment

Although it is often impossible to try to replicate museum-like environments in your home, there are some simple things to consider to keep your collection in good condition.

Ideally, you should try to maintain a stable temperature and humidity in the rooms housing your collection. Some items, such as watercolours, are particularly sensitive to light, so you should try to reduce the amount of direct sunlight these works get and consider either rotating your displays and/or protecting works with UV resistant glass.

As part of a collections review or valuation, Sotheby’s would be delighted to discuss any concerns you might have about how your collection is being maintained and displayed. General guidance can also be obtained from the English Heritage website.

If a work of art is particularly difficult to display in your home, you may want to think about keeping it in specialised fine art storage or lending the work to a museum.

D. Loans

You may wish to consider lending pieces from your collection to a museum, either for an exhibition or on a long-term basis. A loan to an important museum has the potential to increase a work’s value: its display is testament to its art-historical significance and can bring the work to wider international attention. Sotheby’s is able to draw on its global network of museum contacts to help you find the most suitable museum in which to display your work of art.

Regardless of the duration of the loan, it should always be underpinned by a loan agreement. In particular, this agreement should set out which party is responsible for insurance, the costs of transport, and any other conditions for display. Usually, under the terms of a loan agreement the museum will be responsible for insuring the work, whether that is with a commercial insurer, or more commonly, with the government backed Government Indemnity Scheme (GIS), which provides owners with ‘nail to nail cover’, including when the work is being transported to and from the museum. Forsters can assist you with negotiating the terms of a loan agreement.

E. Holding vehicle

If an individual is UK resident but not a long-term resident in the UK, and holding art in the UK, it may be worth considering holding the art via an offshore structure, such as a non-UK company, so as to shield the artwork from UK inheritance tax. Broadly, an individual will be a long-term UK resident for a UK tax year if they were UK resident for at least 10 of the previous 20 tax years. There may, in addition, be succession considerations, for example, staying outside of certain succession and tax regimes, or other assets protection reasons, that point toward ownership through a trust. Matters regarding succession will be considered in further detail in Part 4.

If the intention is to hold art in an offshore structure (be it a company and/or a trust), then the tax implications of the transfer to the structure need to be considered (for this reason, and as outlined in Part 1, it is preferable to think about the asset’s use and future before going ahead with the original purchase, so that the structure is right from the outset). There are also other considerations that come into play here, which relate to the ongoing management and use of the offshore structure. If you would like advice on the most effective way to hold your artwork, both from a tax and succession perspective, please contact Forsters.

In the next part of the mini-series, we will be looking at the implications of passing on your art to the next generation.

PART 4


Please note that this briefing offers general guidance on the transportation of artwork. The circumstances of each case vary, and this note should not be relied upon in place of specific legal advice.

Felix Hale at Sotheby’s

Felix Hale is a Director in Sotheby’s Tax, Heritage, & UK Museums department (Fiduciary Client Group) and is a member of Sotheby’s UK Chairmen’s Group. He has over a decade’s experience in the industry, having joined Sotheby’s in 2014.

He works with some of the most significant estates and collections in the UK, working with clients on valuations, sales, offers in lieu of tax, and claims for Conditional Exemption. He also frequently represents clients before the government Export Reviewing Committee. Felix is a STEP qualified Trust and Estate Practitioner (TEP) a member of the Professional Advisors to the International Art Market (PAIAM).

If you would like to contact Felix, you can email him on [email protected].

Jo Thompson from Forsters

Jo Thompson is an associate in Forsters’ Private Client team and part of Forsters’ Art and Cultural Property Group. She acts for UK and international clients, advising high net worth individuals, families, landed estates, family offices, trustees and beneficiaries on a range of estate, trust and tax planning matters. Her work includes succession planning for a number of living artists and advising on heritage property matters. She also acts for high net worth individuals and trustees holding significant art collections.

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