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  • Jan Ghysen

Capital gains tax on art

Normal management of private assets?



On the 6th of June 2019, the Brussels Court of Appeal has rendered a decision on the taxation of capital gains on art.


An art history student had purchased a painting, which was not signed or dated, but was attributed to Vincent VAN GOGH. The student was financially independent, yet he did not exercise a professional activity. He purchased the painting with a loan, with his parents appointed as guarantors. He bought the painting for 2.640.000,00 BEF (roughly €65.500,00) and sold it a year later for 8.750.000,00 BEF (roughly €217.000,00), more than tripling his initial investment. The painting was sold to a family owned company, of which he became director shortly after.


The Belgian tax administration taxed the capital gains as a diverse income at 33% because of the fact that he had made the purchase in line with his study (and therefore future profession), he had to lend the initial amount and a presumed speculative intention. Furthermore, they estimated that the transaction did not fit into the general term of “normal management of private assets”, because of the sale to his family company.


If a transaction would fall under the scope of “normal management of private assets”, the tax rate would be 0% instead of 33%.


The student did not agree with the decision of the Belgian tax administration and the case went to court. The Court of Appeal decided that the tax administration was wrong because, according to the Court, there was no speculative intention which is key to fall under the scope of diverse income. The Court argued that the purchase was made as a fan of the arts and more particularly, Vincent VAN GOGH. The fact that the painting was sold to his family company, was only to keep it in the family estate, while at the same time being able to pay back the loan to the bank, for which his parents were held as guarantors.


The concept of “normal management of private assets” has been the subject of many discussions between the taxpayer and the tax administration, and will continue to be for as long as there is no clear definition of what constitutes normal management and what doesn’t. TThe taxpayer wants to be certain of the taxes they would have to pay due to a certain transaction. Today, however, that is not always the case, especially when it comes to capital gains tax on art. On the other hand, the large ambit of the concept allows the discussion to make certain transactions fall under the scope.


If you have any questions in regards to capital gains taxation, or any tax issue in general, we at Vanbelle Law offer years of experience in the field. Please feel free to contact us!