Thank you for your extensive explanation. It really helps a lot to have another person's opinion!
My department here seems quite divided on which path I should take. I intend to eventually work in the field of Art Law (entering law school following my masters and, perhaps, doctoral programme(s) in History of Art). My intention is to, at either school, write an interdisciplinary dissertation incorporating art/legal theory (hence why I did not apply to Courtauld). From that perspective, Oxford would probably look better to law schools. However, I don't want to decide purely based on that.
I agree that UCL's atmosphere is are wonderful and my department has a longstanding relationship with it. Also, the location cannot be beat. However, I do feel like I may be a slightly better fit for Oxford academically. I have previously studied at Cambridge, so I know the Oxbridge system well...
While I entirely understand your beliefs regarding Oxford's no-work rules, I do not plan to work while completing my graduate studies. As such, those rules have not been a consideration for me. As long as I receive even partial funding from some source or another, I'll be able to handle the costs.