HUNGARY Law and Practice Contributed by: Katalin Andreides, Andreides Law
10. Gifts, Donations, Trusts and Inheritance 10.1 Planning for Generational Transfer of Artworks The generational transfer of an artwork or art col - lection requires careful legal, financial and strategic planning to ensure smooth succession while preserv - ing its value and integrity. Key considerations include establishing clear ownership and provenance, using estate planning tools such as wills, trusts or private foundations, and obtaining professional appraisals for accurate valuation. Tax efficiency is crucial, with strat - egies like gifting, charitable donations and fractional ownership helping to mitigate estate and inheritance tax burdens. Legal compliance, especially in cross- border transfers, should also be assessed to avoid complications. Beyond financial and legal aspects, preservation and education are essential for maintaining the collection’s legacy. Proper conservation, storage and insurance ensure the artworks remain in good condition, while educating heirs or appointing professional advisers facilitates informed management. Succession plan - ning, whether through direct inheritance, a struc - tured foundation or museum donations, should align with the family’s vision and legal framework. A well- planned transfer not only protects the collection but also ensures it continues to be appreciated by future generations. 10.2 Legal and Fiscal Issues in Artwork Succession If someone inherits from a deceased relative, they must pay inheritance tax on the estate. Inheritance tax on artworks located abroad must be paid in Hungary only if the country where the asset is located does not require the payment of an equivalent tax or duty. In the case of inheritance, the tax base is the net value of the artwork acquired by the heir, meaning the mar - ket value of the asset minus the value of any debts encumbering the estate. The general rate of inherit - ance tax is 18% of the net value of the inheritance.
As a matter of Hungarian jurispudence, it is sufficient that a minimum level of individuality is present in the product. This means that it should not be entirely determined by circumstances or the equipment used, allowing at least minimal room for human choice between different solutions, and that it should not be a slavish copy of an existing work. 8.2 Legal Protection for Different Types of Photographs Article 6 of Directive 2006/116/EC of the European Parliament and the Council on the term of protection of copyright and certain related rights establishes that the sole requirement for a photograph to qualify for copyright protection is that it constitutes the author’s own intellectual creation and that no other criteria may be applied in this regard. Accordingly, Hungar - ian copyright law protects photographs of individual and original character. 9. Artworks and New Technologies 9.1 NFTs NFTs (non-fungible tokens) are blockchain-based, non-replaceable digital representations (tokens) of real or virtual content (objects or data). Through structured metadata, they enable the sale of these tokens – and, in rare cases, the underlying content – in exchange for alternative (cryptocurrency-based) compensation, without the need for intermediary service providers. 9.2 Counterfeit NFTs An NFT represents a tool, pathway or method of communicating information. The token is generally excluded from copyright protection. However, NFTs are always created for the purpose of managing underlying (physical or digital) content. This underly - ing content is subject to copyright and/or related legal protection.
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