Is the Cultural Gifts Scheme working? - Museums Association

Is the Cultural Gifts Scheme working?

Rebecca Atkinson reports on the progress of a government scheme to enable UK taxpayers to donate works of art and other heritage objects to the nation
As part of its drive to encourage philanthropic giving through tax incentives, the government launched the much anticipated Cultural Gifts Scheme earlier this year.

The scheme enables UK taxpayers to donate works of art and other heritage objects to be held for the benefit of the public or the nation.

In return, donors receive a tax reduction based on a set percentage of the value of the object they are donating.

The scheme was launched in March, a few weeks before the end of the financial year. The only case before the end of that year was Beatles biographer, Hunter Davies donating his collection of John Lennon lyrics and letters to the British Library.

Arts Council England (ACE), which administers the scheme on behalf of the government, is confident that the scheme will be attractive to more donors, although it is unclear how many donations will be expected in a full year.

The arts council announced that public collections gained £49.4m worth of artworks and cultural objects through the Acceptance in Lieu scheme in 2012-13, which, for the first time includes an item accepted through the Cultural Gifts Scheme.

The figures for 2012-13 show there were 30 cases under the Acceptance in Lieu and Cultural Gifts schemes with a total value of £49.4m – an increase from previous years (see box). 

This could be due to the fact that the annual tax threshold was increased in 2012-13 from £20m to £30m in recognition of the inclusion of donations under the Cultural Gifts Scheme.

The increased threshold has allowed more Acceptance in Lieu gifts this year; the arts council’s annual report shows that Lennon’s lyrics and letters settled £120,000 worth of tax – meaning tax settled in the Acceptance in Lieu scheme was £88,000 above the previous threshold.

ACE says having a single budget creates flexibility while the Cultural Gifts Scheme becomes an established part of philanthropic planning.

Assuming there are more cases in future years, the £10m increase to the threshold may not be large enough.

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