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Acceptance in Lieu
Acceptance in Lieu Annual Reports
Paying and Preserving: Inheritance tax and our heritage
Notices of Intention of Sale
Items for Allocation
Conditional Exemption
Acceptance in Lieu Annual Reports
Acceptance in Lieu Report 2002/03
This report details the works of art offered to the Acceptance
in Lieu scheme in the year ending 31 March 2003. These magnificent
treasures from Europe, Africa, Asia and America demonstrate
the breadth and success of the AIL scheme and its ability
to bring into the public domain items which were once private
property.
Acceptance
in Lieu Report 2002/03 PDF
828KB
Acceptance in Lieu Report 2000/02
This report of the Acceptance in Lieu Scheme covers the
two years ended 31 March 2001 and 31 March 2002. In these
two years, the first two since Resource came into existence,
the Acceptance in Lieu Panel has played a major role in
advising Government on those offers that should be accepted,
encouraging new offers and putting forward to Ministers
recommendations on where the items, once accepted, should
be allocated. The results are set out in this report.
Acceptance
in Lieu Report 2000/02: Part 1 PDF
346KB
Acceptance
in Lieu Report 2000/02: Part 2 PDF
1.6MB
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Paying and Preserving: Inheritance tax
and our heritage
Would you like to make a contribution to the nation's heritage
when paying inheritance tax?
What kinds of object are relevant to the scheme?
How does the scheme work?
Who can use the scheme?
The initial offer
What happens next?
Where will my object go?
Benefits for the offeror
Benefits for the acquiring museum, gallery or library
What should I do next?
Would you like to make a contribution to the nation's heritage
when paying inheritance tax?
The Acceptance in Lieu (AIL) scheme enables taxpayers to transfer works of
art and important heritage objects into public ownership while paying tax. This
section outlines the purpose and process of the scheme, identifying the benefits
to potential offerors and receivers (museums, galleries, libraries and archives).
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What kinds of object are relevant to the scheme?
The Inland Revenue may, with the approval of the appropriate Minister, accept
works of art, manuscripts, heritage objects and historic documents in payment
of inheritance tax (or its earlier forms capital transfer tax or estate duty).
Land and buildings can be accepted in lieu, but different rules apply.
These items must be 'pre-eminent', in other words, of particular historical,
artistic, scientific or local significance, either individually or collectively,
or associated with a building in public ownership, such as a National Trust
property, which will be expected to have public access for at least 100 days
each year.
Objects must be in acceptable condition.
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How does the scheme work?
Offers in lieu are made to the Inland Revenue. They must be approved by the
Secretary of State for Culture, Media and Sport (or the appropriate Minister
in the devolved governments in Scotland or Wales) who is advised by Resource's
Acceptance in Lieu Panel. This Panel consists of independent experts, who seek
specialist advice on the object offered.
In the light of that advice, the Panel recommends whether or not the object
in question is pre-eminent and assesses its open market value. The Panel's recommendations
are made to the Secretary of State for Culture, Media and Sport (or the appropriate
Minister outside England), who decides whether or not an item should be accepted.
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Who can use the scheme?
Anyone who is liable for the payment of an existing inheritance tax bill can
offer an object in part or whole payment of the tax. This is known as 'Acceptance
in Lieu', hence the title of the scheme. All advice on pre-eminence, valuation
condition and allocation (except for the allocation of manuscripts) is managed
by Resource.
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The initial offer
If you have an object which you would like to put forward, please write to
Inland Revenue Capital Taxes, Ferrers House, PO Box 38, Castle Meadow Road,
Nottingham, NG2 1BB. It would be helpful, although not essential, to send a
copy to the Capital Taxes Manager at Resource: The Council for Museums, Archives
and Libraries, 16 Queen Anne's Gate, London SW1H 9AA.
You should include the following:
- a valuation and justification of the valuation;
- a description of the object;
- at least three photographs, preferably in colour;
- details of where the item can be inspected and with whom inspection should
be arranged;
- evidence that the offeror has good legal title to the object and details
of its ownership between 1933-1945;
- and details of the occasion which gives rise to the payment of tax (send
to Inland Revenue only).
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What happens next?
If your offer meets the basic criteria of the scheme, the Inland Revenue will
formally refer it to the Acceptance in Lieu Panel who, having consulted independent
Expert Advisers, will make a recommendation to the Secretary of State. The Expert
Advisers are generally museum or gallery curators, scholars or members of the
art trade.
When assessing the valuation of an offer, the Panel, on the basis of the advice,
will take a view on whether it is too high or too low.
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Where will my object go?
All objects accepted under the scheme are allocated by the Secretary of State
to a public institution to ensure that public access is guaranteed to as many
people as possible. The offeror can make the offer conditional upon allocation
to a specific institution. If an offer is unconditional, institutions are invited
to make an application for the object via advertisements in the Museums Journal
and on the Resource website, http://www.resource.gov.uk.
The AIL Panel takes into account any wishes which have been expressed before
offering advice to the Secretary of State on appropriate locations.
Objects associated with a building
Often items are offered which have a strong link with a historic building in
public ownership, such as a National Trust property. These items will be transferred
to the owner of the building so that they can remain in or return to their historic
setting, provided that there is suficient public access.
Some items are accepted for AIL because of their place in an important historic
house in private ownership. Such items have an additional significance from
being seen within the context for which they were created or with which they
are associated. In this case, the objects can remain in situ provided that conditions
of security and public access are met. Ownership of the items will pass to a
public museum, but the items will be lent back to the owner of the house where
they will be displayed.
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Benefits for the offeror
- In satisfying a tax liability, an offeror is able to apply a higher proportion
of the value of an object if it is offered in lieu than if the same object
is offered at auction. This is because of the 'special price' or 'douceur'
which is available in these cases. For example, if in order to settle a tax
liability, an estate sells an object valued at £100,000 on the open
market, inheritance tax is generally payable at a rate of 40% and the estate
receives £60,000.
If the same object is offered in lieu, 25% of the tax that would have been
payable is remitted to the estate, with the result that the object has a tax
settlement value of £70,000. An object is, therefore, worth 17% more
if it is offered in lieu of tax than if it is sold on the open market at the
same price.
- The Inland Revenue cannot 'give change' if the 'special price' is higher
than the tax you have to pay. But an institution may be prepared to pay you
the difference on condition that you make your offer conditional on the object
being allocated to them.
- Interest on the amount of tax settled by the offer will normally stop running
from the date of the offer.
- There is a reduction of the amount of tax payable on the estate.
- In certain cases the object can stay in situ, remaining an integral
part of a collection, even though the ownership will have changed.
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Benefits for the acquiring museum, gallery or library
- The primary benefit for a host/acquiring museum, gallery or library is that
it receives an important object at no cost.
- Objects which may already have been on long-term loan can be acquired.
- In addition, objects of local interest can be retained, provided that they
meet the criteria of the scheme.
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What should I do next?
This section outlines the main points of the scheme. Inevitably each case will
be different. After reading this general guidance we suggest you contact us
to find out more. Please contact:
Gerry McQuillan,
Capital Taxes Manager
Resource: The Council for Museums, Archives and Libraries
16 Queen Anne's Gate
London, SW1H 9AA.
Telephone: 020 7273 1456
Fax: 020 7273 1424
Email: gerry.mcquillan@resource.gov.uk
We will undertake to deal with your query as quickly as possible and in any
case to give you an initial response within 14 days.
If you are not satisfied with our level of service please write to the Chief
Executive, Resource: The Council for Museums, Archives and Libraries,
16 Queen Anne's Gate, London SW1H 9AA.
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Conditional Exemption
Resource also advises the Inland Revenue on works of art, manuscripts, heritage objects and historical documents, which are preserved
and made available to the public in return for exemption from Inheritance Tax
or Capital Gains Tax.
Inland Revenue
- Tax exempt heritage assets and how to see them
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