Nikolaus Alexander Mair van Landshut, Portrait of a Young Girl in a Bow Window. Courtesy the Ashmolean Museum

The government’s Spoliation Advisory Panel has ruled that a painting in the possession of the Ashmolean Museum in Oxford was sold at fair value at auction and was not the product of a forced sale by the Nazis.

Portrait of a Young Girl in a Bow Window, attributed to Nikolaus Alexander Mair van Landshut was bequeathed to the museum by William Spooner, a collector, in 1968 and is on public display in the museum’s galleries.

Previously sold at auction in Germany in 1936, the German Law firm Huth Dietrich Hahn, acting for the heirs of Jakob Goldschmidt, began proceedings to seek the return of the painting from the Ashmolean in August 2002.

The claim was taken up and investigated by the Spoliation Advisory Panel, which was established in April 2000 to resolve claims on art looted during the Nazi era.

“The Ashmolean acquired the painting in good faith and has an unassailable legal title to it," the Panel reported on March 1 2006. "The Museum, having been aware throughout that the painting had belonged to Goldschmidt, could reasonably have assumed that it had been sold to settle his debts.”

Goldschmidt was one of the most prominent German bankers of his day and a well-known art collector between the First and Second World Wars. However following the world economic crisis in 1929 his Danatbank dramatically collapsed and he incurred major personal liabilities as a result.

The Ashmolean was praised by the Advisory Panel for acting with 'all due propriety' over the claim regarding the painting. Courtesy the Ashmolean Museum

The Advisory Panel, which is headed by The Right Honourable Sir David Hirst, found that ownership of the painting was transferred to the Danatbank in December 1931 as security for Goldschmidt’s debts caused by the collapse of the bank.

Their report concluded: “The painting was sold at auction in 1936 pursuant to Goldschmidt’s agreement…to liquidate his assets and reduce his Danatbank/Desdner Bank liability; it was not a sale forced by the Nazi regime.”

“The Ashmolean only became aware of this spoliaition claim in August 2000, since when it has acted with all due propriety,” added the report. The ruling has now been endorsed by the government and welcomed by the Ashmolean Museum.

"The Ashmolean is grateful to the Spoliation Advisory Panel for the report on this claim,” said a museum spokesperson.

Nikolaus Alexander Mair van Landshut was born in Landshut in Germany and was active between 1492 to 1514. The painting, which is an oil on wood, shows a young woman with an enigmatic smile holding a flower.