U.K. Seeks to Prevent Foreigner Tax From Affecting Art Assets, Yazzy's at www.williamverdult.com

According to Bloomberg news, the U.K. government is seeking to protect art investments from the potential side effects of a tax on non-domiciled residents, Minister of State for Culture Margaret Hodge said.

``We've got to ensure that in this legislation there isn't an unintended consequence,'' Hodge said at a philanthropy conference held at the Barbican Centre in London's financial district. ``I recognize the issue. We've just got to get it right.''

Starting this April, the U.K. Treasury plans to give foreigners who are resident in Britain the choice of declaring worldwide income or paying an annual levy of 30,000 pounds ($58,000). The tightening of the rules is raising concerns that art investors may begin keeping artworks offshore to prevent them from falling into the U.K. tax net and that philanthropists will be discouraged from giving to the arts.

Attending the conference, Nick Ferguson, chairman of the Courtauld Institute of Art, spoke out against the so-called ``non- dom'' tax. He said 60 percent of the Courtauld's funding in the last five years was from ``non-doms.'' So were more than 35 percent of the funds given to the Victoria & Albert Museum, where three new galleries have all been endowed by, and named after, non-doms, he said.

Ferguson also said the top three givers to the British Museum were non-doms.

Referring to non-domiciled residents, he said, ``They feel seriously attacked at the moment.''

Arts & Business, a charity that links the arts with corporate and individual givers, also spoke out against the tax.

``Arts & Business opposes anything that detracts or hinders the ability of the private sector to invest in the U.K.'s culture,'' said the charity's chief executive Colin Tweedy in a statement yesterday. ``The business community is unanimous that these proposals may damage future investment in culture and possibly actively discourage non-domiciles from bringing art into the U.K.''