Croydon may face tax bill over Riesco sale - Museums Association

Croydon may face tax bill over Riesco sale

Auction broke terms of conditional exemption
Geraldine Kendall; Patrick Steel
Croydon Council may be facing a tax bill after its sale of several valuable items from the Riesco Collection of Chinese ceramics, which raised just over £8m at Christie’s Hong Kong last month.

A 1959 agreement between local businessman Raymond Riesco and Croydon Corporation, as the council was then known, shows that Riesco received an estate duty (now called inheritance tax) exemption in respect of the collection by giving it to Croydon.

The council received the collection free of charge as part of a deal on its part to purchase land from Riesco.

The document, which was obtained through a Freedom of Information (FOI) request by Croydon Natural History and Scientific Society, stipulates that in order to obtain the tax exemption: “The Corporation shall undertake with the vendor or his executors as follows: (a) the Riesco Collection will be kept permanently in the United Kingdom and will not leave it temporarily except for a purpose and period approved by the Treasury; and (b) reasonable steps will be taken for the preservation of the Riesco Collection.”

A Treasury spokesman said he was unable to comment on individual cases but said: “Conditional exemption from estate duty was in place in 1959 and the sale of an object that had been exempted would bring the exemption to an end – as would taking the item out of the UK without permission.”

He added that an estate duty claim would “extend to the open market value of the object at that time”.

Croydon Council has not confirmed whether it sought permission from the Treasury to bring the items abroad or notified HM Revenue and Customs, which now deals with conditional exemption, of its intent to sell.

A council spokesman said: “This is not the first time part of the collection has been sold, with precedents in 1970 and 1984. As owners of the collection, we are acting legally and in exceptional circumstances for the benefit of Croydon's cultural future.”

The council is also facing criticism that it failed to follow its own disposals procedure after a further FOI request showed that it began tendering for an auctioneer on 7 June 2013, a month before its consultation with stakeholders and the public closed, and five weeks ahead of a committee vote on the sale.

A news analysis on the Croydon case and bequests in general will be published in the next issue of Museums Journal

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