Ashmolean launches fundraising drive to keep 'pre-eminent' Turner - Spear's Magazine

Ashmolean launches fundraising drive to keep 'pre-eminent' Turner

Claire Roberts on how you too could slash your inheritance tax bill by bequeathing treasures to the nation

The Ashmolean Museum in Oxford has just launched a fundraising appeal to keep JMW Turner's major painting 'The High Street, Oxford'. The painting, which has been on loan to the museum from a private collection since 1997, is valued at ’3.5 million and has been accepted in settlement of a ’2.64 million inheritance tax bill. The Ashmolean must therefore raise ’860,000 to pay the difference

Earlier this year, 37 paintings by Winston Churchill worth ’9.4 million were offered following the death of his last surviving child, Mary Soames. The inheritance tax liability was less than the tax settlement value of the paintings, but the executors of Lady Soames's estate agreed to forgo the difference. The paintings remain at Chartwell, where they had been on long-term loan.

The object is accepted by the government for the full open market value and it is then given to a public museum, gallery or library. Where, as in the case of 'The High Street, Oxford', the object is worth more than the tax that is due, the acquiring museum, gallery or library must pay the difference.

The scheme applies to works of art, manuscripts, heritage objects and historic documents and also to land and buildings. To be accepted, the assets offered must be 'pre-eminent', meaning they must be of particular historic, artistic, scientific or local significance, either individually or collectively, or associated with a building in public ownership.

The tax incentives for potential donors were extended in 2012 by the introduction of the Cultural Gifts Scheme (CSG). This allows taxpayers to donate pre-eminent objects and works of art (but not land or buildings) to the nation during their lifetime in return for a tax reduction. Individuals donors currently receive a tax reduction of 30 per cent of the agreed value of the object.

The Treasury now has an annual budget of up to ’40 million worth of tax which can be offset by AIL and CGS.

The scheme offers clear tax benefits to estates. Not only does the estate receive the full market value of the item without the expenses of an auction, but there is the added incentive that the tax due is reduced by 25 per cent. The result is that an object is therefore worth 17 per cent more if it is offered in lieu of tax than if it is sold on the open market at the same price. Financial benefits aside, the donor has the opportunity to contribute to the nation's heritage.

The benefits for the acquiring museum, gallery or library are obvious. It receives an important heritage object or piece of art, that may otherwise have been retained in private ownership, at either no cost or at a much reduced cost.

The Arts Council 2014 Report on Cultural Gifts Scheme & Acceptance in Lieu (available on their websitewww.artscouncil.org.uk) shows that ’30 million worth of assets were donated in 2013/2014 under AIL and CGS. The eclectic mix of assets included works by Frank Auerbach, which together with the work of four other artists settled a tax bill of ’16,252,425), an illuminated manuscript, which settled a tax liability of ’2,187,883 and land at Mount Stewert (one of the most important country houses in Northern Ireland), which settled a tax liability of ’1,651,154.

Although the headlines are dominated by multi-million pound pieces of artwork, much smaller pieces have been accepted. In 2013/2014, a collection of 99 political posters from the 20th Century was accepted at ’3,397 (and allocated to the University of Bristol) and in 2010/2011, a rock crystal specimen was accepted at ’3,661 (and allocated to the Natural History Museum).

I wonder if George will be tempted to produce another 'people's budget' next month…

Claire Roberts is an associate at boutique private wealth law firm Maurice Turnor Gardner LLP



 

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