Interesting article in The Telegraph this week about how the "rich and famous settle their Inheritance Tax bills using art, diaries - and tea coasters"!
The writer is referring to the Acceptance in Lieu (AIL) Scheme, which enables taxpayers to satisfy some or all of their Inheritance Tax liability by transferring important cultural, scientific or historic objects and archives to the nation.
The item in question must be in reasonable condition and be “pre-eminent”, i.e. of particular historic, artistic, scientific or local significance, either individually or collectively, or closely associated with a particular historic setting. Material accepted is allocated to public museums, archives or libraries and is available for all.
The AIL Scheme ensures that the most important of the nation's cultural objects remain within the UK and become accessible to the public... and also provides a welcome opportunity for IHT relief!
The family of a German textile merchant who fled the Nazis have effectively paid a £6.5m inheritance tax bill by gifting “the most important manuscript in the history of art” to the British public. Paul Gauguin's Avant et Apres will now be on public display at London's Courtauld Gallery – the first time the writings have surfaced since WWII. The book was gifted by Thomas Goeritz, the descendent of the previous owner Erich Goeritz who left Nazi Germany in 1934 and who had kept the manuscript out of the public eye. By giving the work under the Acceptance in Lieu Scheme, the family was able to settle a large tax bill. Charitable donations of important cultural works can be made in place of paying IHT in the normal way. Last year the manager of contemporary artists Damien Hirst paid off a £90,000 IHT bill by donating 73 coffee-stained place mats the artist had doodled on, deemed cultural treasures by Arts Council England.
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