Wealthy Families Wipe Out Tax By Handing Over Art

Culture vultures who invest in art not only have the enjoyment of their collections but a valuable tax offset gracing their homes.

Depending on the pre-eminence of the work of art, paintings, sculpture and other works can reduce inheritance tax in the UK.

Taking the recent auction of rock star David Bowie’s art works which raised £33 million.

The money goes back into his £60 million plus estate for the executors to pay off inheritance tax which is estimated at around £27 million if subject to tax in Britain.

This leaves his family and loved ones to benefit from the full value of Bowie’s wealth.

Historical archives

Another option for families with celebrated art works is the Acceptance In Lieu scheme run by HM Revenue and Customs (HMRC) with the Arts Council.

In 2015, the council had a £40 million offset agreed that allowed the protector of Britain’s art heritage to safeguard many valuable pieces for the nation.

Instead of paying inheritance tax bills, families offset the amount by offering the arts council paintings by Sir Edwin Landseer, John Constable, Sir Winston Churchill and William Holman Hunt.

The paintings will go on display in public art galleries across the country.

“Less visible but just as significant is the impressive range of important historical and military archives which have come into public ownership,” said Arts Council England chairman Sir Peter Bazalgette.

Increasing awareness

“Families have handed over the archive of the Earls of Raglan, containing correspondence from Wellington following the battle of Waterloo; and the papers of Margaret Thatcher, which holds a personal memoir of the Falklands War and the final draft of her remarks in Downing Street when she became Prime Minister in 1979.”

Another similar scheme run by the arts council encourages wealthy donors to gift important works during their lifetimes.

Bazalgette explained the council would like to take more acceptance in lieu art but is constrained by the £40 million budget.

“We would very much like to increase awareness of the schemes to encourage further gifts and offers to be made and would welcome any suggestions as to individuals, groups or organisations that would benefit from learning more about the options,” he said.

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