Skip Navigation
MLA ACTION
Access Optionsarrow
About us News Action Information Search Help

Help on using this website

Search this website

View printer friendly version of this page

Email this page to a friend or colleague

Investing in Knowledge
International
Regional
People's Network
Renaissance
Action for Archives
Framework for the Future
Wider Library Issues
Standards & Registration
Learning & Access
Designation
Collections
Managing Risk
Workforce
Acceptance in Lieu
Portable Antiquities
Govt Indemnity Scheme
Online Initiatives
DCMS Wolfson
PRISM Fund

 Section description will appear here

Thos Gladwin (1719-20) - Tea Kettle and Lamp, National Museum of Wales Henry Wilson - Belt buckle, Victoria and Albert Musuem Barbara Hepworth - Three figures from the Family of Man, Fitzwilliam Musuem . Photograph © Copyright Alan Bowness, Hepworth Estate Sherbourne Missal, British Library A Koechs (c1694) - Delft Cream Pan, Hampton Court Palace Van Dyck - Abbé Scaglia, National Gallery

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 2002/03format: pdf v.1.4PDF 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 MLA 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 format: pdf v.1.4PDF 346KB
Acceptance in Lieu Report 2000/02: Part 2 format: pdf v.1.4PDF 1.6MB

toptop

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).

toptop

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.

toptop

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 MLA'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.

toptop

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 MLA.

toptop

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 MLA, 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).

toptop

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.

toptop

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 MLA website, http://www.mla.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.

toptop

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.

toptop

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.

toptop

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
MLA
16 Queen Anne's Gate
London, SW1H 9AA.

Telephone: 020 7273 1456
Fax: 020 7273 1424
Email: gerry.mcquillan@mla.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, MLA,
16 Queen Anne's Gate, London SW1H 9AA.

toptop

Conditional Exemption

MLA 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

toptop


Home | Investing in Knowledge | International | Regional | Peoples Network | Renaissance | Action for Archives | Framework for the Future | Wider Library Issues | Standards & Registration | Learning & Access | Designation | Collections | Managing Risk | Workforce | Acceptance In Lieu | Portable Antiquities | Govt Indemnity Scheme | Online Initiatives | DCMS Wolfson | PRISM Fund
Copyright © MLA 2004. All rights reserved. Legal Notices Design & Technology by ReadingRoom