Joseph and Potiphar’s Wife, given
under the Acceptance in Lieu scheme
The idea is that a prospective donor will offer a work of art to the government. A panel of experts will then judge whether the work is ‘pre-eminent’ or merely nice. If the former, the panel will value the work and the donor will gain a tax deduction of (it is suggested) 25% of that value. Broadly, the nation gets 75% of the work for free, the donor saves tax, and everyone’s happy.
Respondents to the consultation have, however, pointed out a few possible flies in the ointment. These include the following:
• although the donor can express a preference as to where the work of art goes, they won’t be given the final say. Some donors may not care for the idea that they cannot be sure that the work will go to their preferred charity;
• donors may find it more tax advantageous to simply sell a work of art and make a Gift Aid donation of the profits after tax to their chosen charity. This would also enable a donor to be sure that their gift benefits the charity of their choice;
• the scheme’s cap of £1m per object and £2m per donor in tax deductions may deter owners from donating more valuable objects; and
• where inheritance tax on an object has been deferred under a conditional exemption, and the object is then donated under the scheme, inheritance tax on that object could then become payable.We look forward to discovering how far these concerns will influence the final shape of the scheme. Draft legislation is expected in early December.
To see the full consultation, click here.
Written for Art & Artifice by Elizabeth Emerson (thanks!)