Responses published: Gifts of pre-eminent objects and works of art to the nation

Last week, the government published the responses to its consultation on 'Gifts of pre-eminent objects and works of art to the nation' (written about in Art and Artifice here). The consultation, published in June 2011, outlined a new scheme aimed at encouraging lifetime gifts of cultural objects to the nation by rewarding the donors with tax breaks based on a percentage of the donated work's value.

Over 50 museums, archives, law firms and other bodies responded to the consultation. Their main concerns centred on a few key issues, including whether donors would be able to specify where their donated objects were displayed, the amount of the scheme's budget, and the amount of tax relief given to donors.

Under the scheme as originally proposed, donors could express a preference as to where their gift went, but their wishes would not be binding - the gift might end up elsewhere. Respondents pointed out that this could undermine links between potential donors and museums or galleries, since donors often want to give items to specific institutions with which they have built up a relationship. Despite these concerns the government has retained this aspect of the scheme and donors will only be able to suggest who should receive their cultural objects. However if in practice donors' wishes tend to be followed, this may not cause as many difficulties as is feared.

Many respondents also felt that the suggested tax relief of 25% of the donated item's value was too low and would inhibit take up of the scheme. Some pointed out that the rate compared unfavourably with similar schemes in other countries, and also that donors might find it more tax advantageous to sell art works and donate the proceeds using the Gift Aid scheme. In response, relief is now set to be increased to 30% for individual donors (and 20% for company donors).

Respondents were also concerned that the new scheme was to share the £20m budget of the existing Acceptance in Lieu (AIL) scheme. No new funds were to be allocated. Just a few high-value gifts might therefore wipe out the whole budget. It is now intended that, although the two schemes are still to share budgets, their joint allocation will increase to £30m.

And one other welcome change has sneaked in - the scheme's unwieldy title appears to have been mercifully shortened to the 'Cultural Gifts Scheme' or CGS.

Read the full consultation response summary from HM Treasury here, and the Department for Culture, Media and Sport's guidance to the new scheme here.