Tax advice of the week: Donate your art to the nation
Dec 20, 2011
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“British taxpayers who donate important works of art to the nation will be able to claim back almost a third of their value against income tax,” says Ben Hoyle in The Times. Museums and galleries have long argued that the lack of incentives for lifetime giving is one of the main reasons that Britain lacks a “booming cultural philanthropy scene” akin to that in the US.
Under the new scheme individuals will be able to claim tax breaks against income tax or capital-gains tax of 30% of the “agreed value of the donated ‘pre-eminent’ works of art or objects of national, scientific, historic or artistic interest, while businesses will be able to claim back 20% against corporation tax”. A panel of experts – who will be constrained by an annual limit of £30m in total tax breaks – will assess whether the work is “pre-eminent” and agree a value.
Though museum directors have welcomed the initiative, there are concerns that the tax break may not be sufficiently generous for the global rich, “who can choose to offer their largesse elsewhere on more favourable terms”.