Today’s 2014 budget announcement included some good news for the UK’s national heritage: the combined annual budget for the Cultural Gifts Scheme (CGS) and the Acceptance in Lieu scheme (AIL) is to be increased from £30 million to £40 million.
|Head of a Peasant Woman, Vincent Van Gogh c. 1884. |
Credit: The National Gallery. Donated under the CGS scheme in 2013
Under the well-established AIL scheme, a person who is liable for inheritance tax can offer pay that tax liability by means of giving “national heritage property” (broadly, art works and other objects which are deemed to be pre-eminent for their national, scientific, historic or artistic interest) in full or part payment of tax, instead of paying cash.
The newer CGS complements the AIL scheme by allowing UK taxpayers to make lifetime gifts of important works of art to the nation in return for reductions in their tax liabilities.
The two schemes currently share a budget of £30 million so that, in any given tax year, the reduction in tax effected under both schemes cannot exceed £30 million. If an artwork for was offered under either scheme whose value would cause the annual limit to be exceeded, it could not be accepted. That budget was raised from £20 million for the AIL scheme alone to £30 million when the CGS was launched, following criticism that the CGS would eat into the AIL scheme’s budget.
Today’s increase means that the potential amount of tax allocated to increasing the UK’s national heritage collection in public hands has doubled since the days since before the CGS was introduced.
Recent donations under the CGS include an early Van Gogh entitled Head of a Peasant Woman (reported on Art and Artifice here), now on display in the National Gallery.