Chattels may be offered to the nation in lieu of inheritance tax or other death duties, if they are considered to be of pre-eminent national interest or associated with a building of outstanding historical or architectural interest. The Heritage & Taxation Advisory Service has over 50 years’ experience of assisting in this highly specialized field.

It may also be possible that an item offered in lieu of tax continues to remain in situ, even though the building is in private ownership, where that building is open to the public, and The Heritage & Taxation Advisory Service has wide ranging experience in advising clients with this specific arrangement.

This Scheme was introduced in April 2013 and gives clients an opportunity for tax planning during their lifetime. The Scheme seeks to encourage philanthropy by offering donors to certain national institutions a tax credit, typically of 30%, of the value of the work of art they donate.

The tax credit may then be applied against the donor’s income or capital gains tax liabilities, or in the case of a company against a corporation tax liability. The tax credit can be used in the year of donation, or otherwise spread over the following five tax years.

Sales to public museums, galleries, local authorities, the National Trust, the National Arts Collections and The Historic Churches Preservation Trust, or other institutions of works of art and objects which are pre-eminent for their national, scientific, historic or artistic interest, can secure valuable tax advantages for their seller.

The Government effectively offers an inducement, usually equivalent to 25% of the taxation that would become due on a sale of the chattel on the open market. The Heritage & Taxation Advisory Service has a long and successful history of completing such transactions.

Exemptions from capital gains tax and inheritance tax in relation to chattels and land are, in reality, a deferral of tax on certain conditions being met throughout the period of tax deferral. Since 1998, these conditions have required greater public access to the exempt items.

Whilst this whole area of taxation has become ever more complex, it remains possible to defer capital taxes if the chattel is either of pre-eminent quality or is historically associated with a building of outstanding architectural or historical interest. Such deferral also extends to buildings and land which are of outstanding architectural, historic, scientific, scenic or amenity interest.

The Heritage & Taxation Advisory Service has extensive experience in advising clients in this area, including the likelihood of exemption being available, the procedures to obtain it and the conditions likely to be attached to it.

Following a sale at auction through Christie's, the Heritage & Taxation Advisory Service can provide (in conjunction with the appropriate specialist departments) valuations at March 1982 and other appropriate acquisition dates. The Service can also assist with negotiations with H M Revenue & Customs on these valuations, if the need arises.

A Maintenance Fund (a form of trust) can be established to support land and chattels which meet their respective qualifying criteria. Land and buildings must be of outstanding architectural, historic, scientific, scenic or amenity interest. Chattels must be historically associated with a building of outstanding architectural or historical interest. Such Funds attract concessionary tax treatment in respect of capital arising from the trust assets which are used to support the qualifying chattels or land.

The Heritage & Taxation Advisory Service is able to assist clients and their professional advisers in considering the advantages and conditions attaching to the establishment of such Funds.