Keeping the family silver - National Heritage property - 02/01/2018
HMRC are keen for the public to “retain and care for our heritage”. Provided certain conditions are met, gifts of property that are important to the National Heritage, such as works of art, stately homes and land of public interest can be exempt from Inheritance Tax (IHT) and Capital Gains Tax (CGT).
National Heritage property includes:
  • Pictures, prints, books, manuscripts, works of art, scientific objects or other non income-producing assets which appear to HMRC to be preeminent for national, scientific or artistic interest.
  • Land of outstanding scenic, historic or scientific interest.
  • Any buildings where special steps should be taken to ensure preservation, because of outstanding historic and architectural interest, together with any area of land that is essential to protect the character and amenities of such a building and any object associated with it.
  • There will be no IHT liability when a qualifying asset is passed down a generation on the death of the owner, provided the new owner agrees to meet the conditions set out by HMRC such as:
  • Keeping the property in the UK, e.g. for works for art.
  • Preservation of the property.
  • Reasonable public access, e.g. display of works of art in a private house, long term loans to exhibitions in museums and galleries, access to stately homes and land. This cannot be confined to access where a prior appointment has been made.
The tax exemptions are conditional and, if the owner fails to deliver on the conditions imposed, the exemptions are withdrawn and the tax previously exempted becomes payable.
Where it is not possible for heritage assets to be kept within the family, there is an “Offer in Lieu” system; i.e. the asset is offered to the nation in lieu of the tax that would otherwise be due. This could leave the owner with a better net cash result than a “normal” sale at auction as no CGT is payable when an asset is disposed of.
The heritage property reliefs are potentially useful ways of enabling assets to remain in the family, when a significant IHT charge might otherwise prevent it. If you think it could apply to a family heirloom, please contact us to discuss your options.

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