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In the heritage and cultural sector, the development of a lifetime giving scheme for art, which had been the subject of many years of debate and lobbying, finally came to fruition in the 2012 Finance Act which introduced the Cultural Gifts Scheme.

The scheme gives a tax incentive to living donors (individuals and companies who are liable to UK tax) to donate important works of art and other heritage objects (including collections and groups) 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 item they donate: 30 per cent for individuals and 20 per cent for companies.

Individual donors can elect to set the reduction against their Income Tax or their Capital Gains Tax bill for the year, in which the donation is made within the subsequent four years. For companies, the 20 per cent tax reduction can be set against their Corporation Tax bill in the accounting year in which the gift is registered.

Giuseppe Franchi (1731–1806) with a Bust of Homer

Giuseppe Franchi (1731–1806) with a Bust of Homer c.1772–1773

Anton Raphael Mengs (1728–1779)

Ashmolean Museum, Oxford

The administration of the scheme is efficient and quick, and donors to date have had a decision as to whether their gift is suitable and their offer value acceptable within a few months or less. The gift of the portrait of Giuseppe Franchi by Anton Raphael Mengs to the Ashmolean took three months to complete and the gift of a Renaissance terracotta foot, also to the Ashmolean, took two months.

The gift itself is not treated as a taxable event for either Capital Gains or Inheritance Tax purposes, so if an object has been exempted from Inheritance Tax or Estate Duty, the effective rate of relief to a donor may be as high as 54 per cent.

The same qualitative criteria of pre-eminence as are used for acceptance in lieu are applied to assess whether the cultural property being put forward under the scheme is of the appropriate quality. This includes considering if the object has an especially close association with history, artistic or art-historical interest, the importance for study, or an especially close association with a particular historic setting, such as objects associated with cathedrals and historic churches, gardens and landscapes. Also considered is any association with a historic building in public ownership, such as objects that are a significant element of the decoration of the property and play an important role in its understanding.

The valuation at which the property is offered to the nation should be at open market value and the same committee of experts which assesses these aspects for offers in lieu – the AIL Panel (Acceptance in Lieu panel) – carries out the same role for the Cultural Gifts Scheme. Donors can say to which museum or gallery they would like the property to go or they can express no preference.

While a preference is not binding on the Government, if the proposed destination is not acceptable, the donors will be told at the same time as they receive the decision on pre-eminence and valuation and given the opportunity to name an alternative home. They will know, therefore, what alternative allocation is being proposed before they are expected to confirm that they wish to proceed with the gift and confirm the legal transfer of the property to the nation.

The property being put forward does not need to be of a certain age nor does the donor need to have owned it for any minimum period.

Although jointly owned works such as by a husband and wife are not eligible, it is open to having ownership pass to one partner at the time of the gift.

The property being proposed for the donation must be made available for inspection by the AIL Panel and its advisers (who will normally consist of two experts in the particular field relevant to the object being donated). The donation will be completed by the physical delivery of the object to the gallery or museum to which the Government decides it should be transferred.

In looking at whether a proposed destination is acceptable, the museum's collections policy, its existing holdings, the level of public access and the security and environmental conditions of the museum proposed by the donor will be taken into account.

If the donor has stated no particular preference, the property will be held temporarily in a museum and then subsequently given to the museum or gallery which makes the most convincing case on the basis of the criteria mentioned above.

The Cultural Gifts Scheme is primarily philanthropic and was introduced as part of the Government's wider emphasis on encouraging philanthropy in the cultural sector. It has taken many years to get the scheme into existence in the UK and it is working well both in attracting donors and enriching the cultural heritage which is accessible in the UK.

There have been 64 donations completed since the scheme began and the number of offers is increasing both from private and corporate donors – the latter mainly art dealers who have given important works in honour of curators such as an album of drawings for works by Hesiod by John Flaxman (a gift from Daniel Katz Ltd to the British Museum in honour of Ian Jenkins, Senior Curator of Ancient Greece).

Donors are delighted to be able to see their wishes for their objects or collections fulfilled in their lifetime and to know that their gifts have a permanent home in our country's great cultural institutions where, like every member of the public, they can go to see them and share the excitement of the other visitors.

The Dinner Party

The Dinner Party 1980

Sam Walsh (1934–1989)

Walker Art Gallery

Gifts include Sam Walsh's The Dinner Party (1934–1989) which has found a particularly appropriate home in Liverpool's Walker Art Gallery. Walsh lived in the city for 30 years and was such a significant part of the influential cultural scene.

Head of a Peasant Woman

Head of a Peasant Woman about 1884

Vincent van Gogh (1853–1890)

The National Gallery, London

The National Gallery has been the recipient of an early Van Gogh portrait, which is not only the sole Van Gogh portrait in the collection but the only work from the artist's formative period at Nuenen before he left for France.

Elizabeth Balguy, née Gould

Elizabeth Balguy, née Gould c.1783

Joseph Wright of Derby (1734–1797)

The Holburne Museum

An elegant portrait by Joseph Wright of Derby is now in the Holburne Museum thanks to the generosity of the museum's former Chairman of Trustees, David Posnett.

The Great Belzoni

The Great Belzoni 1824

Jan Adam Kruseman (1804–1862)

The Fitzwilliam Museum

Jan Adam Kruseman's 1824 posthumous portrait of the celebrated adventurer, Giovanni Battista Belzoni, known as 'The Great Belzoni', was donated by Daniel Katz Ltd and presented to the Fitzwilliam in 2018 (in honour of ex‐Director, Tim Knox). There it joined Belzoni's own gift in 1823 of the sarcophagus lid of Ramesses III. The Fitzwilliam also received Thomas Gainsborough's pastel portrait of Gertrude Leveson-Gower, Duchess of Bedford, in the same year.

Gertrude Leveson-Gower (1715–c.1794), 4th Duchess of Bedford

Gertrude Leveson-Gower (1715–c.1794), 4th Duchess of Bedford c.1767

Thomas Gainsborough (1727–1788)

The Fitzwilliam Museum

A study of a cabbage, by the artist Sir Cedric Morris (1889–1982), was donated to the Garden Museum in 2015.


Cabbage 1956

Cedric Lockwood Morris (1889–1982)

Garden Museum

The picture was painted in 1956 at Benton End, where Morris and his partner, Arthur Lett Haines, lived and gardened from 1940 until the former's death in 1984. The painting was unknown to Morris experts, and was shown to Maggi Hambling, one of the best-known pupils of Morris. She immediately confirmed the painting as his work.

Seated Boy

Seated Boy 1955

Joan Kathleen Harding Eardley (1921–1963)

The Hunterian, University of Glasgow

In 2015 the Hunterian received the first gift under the scheme to a Scottish gallery, Joan Eardley's 1955 Seated Boy, and in 2017 it received the third gift to Scotland, a watercolour painted in 1983 by Dame Elizabeth Blackadder, one of Scotland's greatest living artists.


Orchids 1983

Elizabeth V. Blackadder (1931–2021)

The Hunterian, University of Glasgow

Further donations are under consideration and this relatively new scheme has already proven its importance. It has been notable in bringing an extremely wide range of objects into public collections across the UK and it has the potential to become a major contributor to the growth of the UK's cultural sector. Now more than ever public benefaction is crucial to the survival of our world-class cultural institutions.

Anastasia Tennant, Senior Policy Adviser, Collections and Cultural Property, Arts Council England

You can read a leaflet explaining how the scheme works and the benefits to donors and UK institutions on the ACE website