Collectors avoid record amounts of tax (legitimately)

The Arts Council’s 2019/20 Cultural Gifts Scheme and Acceptance in Lieu Annual Report, show that £40 million in taxes was saved by collectors taking advantage of the government’s two approved tax reduction schemes.

Under the two schemes collectors of paintings, sculptures, fossils, photographs, prints, archives and manuscripts can save substantial amounts of tax by donating valuable collectables to museums and art galleries:

• The Cultural Gifts Scheme allows a pre-eminent property to be made available to the public in return for reductions in Income Tax, Capital Gains Tax and Corporation Tax.
• Acceptance in Lieu allows certain property to be accepted in settlement of Inheritance Tax liabilities.

The report says that objects worth nearly £65 million, settling tax of £40 million, were accepted for the nation including:

For the Cultural Gifts Scheme:

• A group of 32 monoprints by Naum Gabo.
• The archive of artist and record sleeve designer Barney Bubbles.
• A collection of important fossils.
• ​A geological diagram documenting the strata cross-sections of mines in the North of England, measuring a colossal 42 feet in length.

An Acceptance in Lieu

• A series of five paintings by Leonard Rosoman.
• Fifteen works by Frank Auerbach, including an early oil painting depicting Juliet Yardley Mills and a charcoal drawing by R.B. Kitaj.
• Significant archival material including that of Conservative politician Peter Carrington, who served as Foreign Secretary under Margaret Thatcher and acclaimed barrister Jeremy Hutchinson, who defended Penguin Books over its publication of DH Lawrence’s Lady Chatterley’s Lover.
• A significant Manet portrait and a landscape by Camille Corot, a gouache by Marc Chagall and six etchings by Rembrandt.
• The Pond at Letchworth by Spencer Gore.

Useful guides on this topic

Cultural Gifts Scheme and Acceptance in Lieu
The Cultural Gifts Scheme allows pre-eminent property to be made publically available in return for reductions in Income Tax, Capital Gains Tax and Corporation Tax. Acceptance in Lieu allows certain property to be accepted in settlement of Inheritance Tax liabilities.

Heritage Assets: IHT and CGT relief
Under the terms of the Conditional Exemption Tax Incentive Scheme, certain buildings, land, works of art and other objects are given special capital tax status, in order to preserve and protect national heritage for the benefit of the public. 

External links

Arts Council press release