21st April 2023

Breakfast at Christie’s

Louise Garrett

Associate

Thank you to Christie’s Heritage & Taxation team for the opportunity to meet members of our Private Client team this week for a technical discussion on the Inheritance Tax and Capital Gains Tax reliefs available for national heritage assets. How the Acceptance in Lieu and Conditional Exemption Tax Incentive schemes work is a highly specialist area and it was helpful to consider the implications for clients and the assets with which they are concerned.

Since 1896, the preservation and public enjoyment of national heritage property has been supported by government tax policies through the provision of these tax incentive schemes.

Acceptance in Lieu allows those who have a liability to Inheritance Tax (or one of its previous guides – Estate Duty and Capital Transfer Tax) to pay their tax liability by means of transferring ownership of a cultural or historic object, an outstanding building or land, to the nation. This enables private property to come into public ownership at no direct cost to the museum or gallery which becomes the new owner. It is not a gift, but a method of paying tax by a form of tax credit.

Conditional Exemption allows those that have a liability to Inheritance Tax or Capital Gains Tax on certain ‘pre-eminent’ buildings, land, works of art and other objects to defer the liability in order to preserve and protect national heritage for the benefit of the public. Assets that qualify under the scheme are exempt as long as certain conditions are met including a public access requirement and the owner must give undertakings that the item will be maintained and public access allowed.

At Hunters Law LLP we have the expertise to advise owners and custodians of artworks in relation to succession planning, heritage and tax issues.