Museums have welcomed new tax incentives aimed at encouraging the donation of works to the nation. Last month, the Treasury granted 30% relief on income or capital gains tax to donors who give major works of art or historical objects to the nation, as part of the Cultural Gifts scheme.
This means, for instance, that someone donating an object worth £100,000 would receive a £30,000 reduction in their tax bill for that year. The new arrangement runs alongside the Acceptance in Lieu scheme, which offers inheritance tax discounts in exchange for bequests.
The schemes will have a combined annual limit of £30m, rather than the £20m initially proposed in a consultation earlier this year. Significantly, companies that donate works will also be eligible for a 20% reduction in corporate tax.
For individuals, the tax reduction can be spread across a maximum of five tax years, although companies can claim a tax break only in the year donations are made.
The National Museum Directors’ Conference (NMDC) welcomed the £30m limit, saying “the proposed scheme, if well designed, will be crucial in helping to support the formation of long-term relationships between individual and corporate donors, and cultural organisations”.
Meanwhile, Adrian Babbidge, director of heritage consultancy Egeria, said: “The benefits to givers, whether individual or companies, do not precisely match those associated with gifts to charities of other types of asset… [but] the new Cultural Gifts scheme does allow individuals to spread the relief over several tax years, which many others don’t. Only time will tell whether the reliefs will be high enough to incentivise new donors.”
Martin Roth, director of the Victoria and Albert Museum (V&A), stressed that the tax overhaul would lead to a “substantial” long-term benefit to the V&A’s collection.
Neil Wicks, director of finance at Amgueddfa Cymru (National Museum Wales), said: “It’s a positive move that will benefit museums across the UK. However, it may not have such an impact in Wales as in other countries, as we’re not a major recipient of gifts of pre-eminent works of art.”
The government’s plans are timely in light of the publication last month of the first UK Arts Index by the National Campaign for the Arts, which highlighted a sustained decline in private sector support for the arts between 2007 and 2010.
The study found that per capita figure for business individuals fell from £2.65 in 2007-08 to £2.20 in 2009-10.
This means, for instance, that someone donating an object worth £100,000 would receive a £30,000 reduction in their tax bill for that year. The new arrangement runs alongside the Acceptance in Lieu scheme, which offers inheritance tax discounts in exchange for bequests.
The schemes will have a combined annual limit of £30m, rather than the £20m initially proposed in a consultation earlier this year. Significantly, companies that donate works will also be eligible for a 20% reduction in corporate tax.
For individuals, the tax reduction can be spread across a maximum of five tax years, although companies can claim a tax break only in the year donations are made.
The National Museum Directors’ Conference (NMDC) welcomed the £30m limit, saying “the proposed scheme, if well designed, will be crucial in helping to support the formation of long-term relationships between individual and corporate donors, and cultural organisations”.
Meanwhile, Adrian Babbidge, director of heritage consultancy Egeria, said: “The benefits to givers, whether individual or companies, do not precisely match those associated with gifts to charities of other types of asset… [but] the new Cultural Gifts scheme does allow individuals to spread the relief over several tax years, which many others don’t. Only time will tell whether the reliefs will be high enough to incentivise new donors.”
Martin Roth, director of the Victoria and Albert Museum (V&A), stressed that the tax overhaul would lead to a “substantial” long-term benefit to the V&A’s collection.
Neil Wicks, director of finance at Amgueddfa Cymru (National Museum Wales), said: “It’s a positive move that will benefit museums across the UK. However, it may not have such an impact in Wales as in other countries, as we’re not a major recipient of gifts of pre-eminent works of art.”
The government’s plans are timely in light of the publication last month of the first UK Arts Index by the National Campaign for the Arts, which highlighted a sustained decline in private sector support for the arts between 2007 and 2010.
The study found that per capita figure for business individuals fell from £2.65 in 2007-08 to £2.20 in 2009-10.