Gifts of Pre-Eminent Objects and Works of Art to the Nation

The aim of this new scheme is to stimulate lifetime giving by encouraging
taxpayers to donate pre-eminent objects, or collections of objects, to the
nation. In return, donors will receive a reduction in their income tax liability
based on a set percentage of the value of the object they are donating. It is
therefore of a specialised nature, but such is the scope for tax reductions that
we are mentioning it here and are ready to advise fully as soon as the exact
rules are known.

The new scheme will share some elements with the existing IHT
Acceptance in Lieu (AIL) scheme, which will continue to operate in parallel with
this new scheme. The likelihood is that the existing AIL panel of experts will
form the basis of the expert panel that will assess gifts made to the nation
under the new scheme. Both schemes will share the annual limit that has been
available to date for the existing IHT AIL scheme (currently set at £20m per
year, so not a worry for most people!).

At present the scheme is up for consultation, but with the proviso
that some aspects will not change, such that the new scheme will apply to items
that are donated to the nation and will operate within an annual limit. The tax
reductions offered under the new scheme will be equal to a set percentage of the
value of the object being donated. It will only apply to pre-existing objects
and will not cater for, for example, commissioning the creation of new objects.
Finally, the new scheme will be limited to chattels (moveable objects), given
that donors may already claim income tax relief or corporation tax relief on
gifts to charities of land and buildings.