The aim of this new scheme is to stimulate lifetime giving by encouraging taxpayers to donate pre-eminent objects, or collections of objects, to the nation. In return, donors will receive a reduction in their income tax liability based on a set percentage of the value of the object they are donating. It is therefore of a specialised nature, but such is the scope for tax reductions that we are mentioning it here and are ready to advise fully as soon as the exact rules are known.
The new scheme will share some elements with the existing IHT Acceptance in Lieu (AIL) scheme, which will continue to operate in parallel with this new scheme. The likelihood is that the existing AIL panel of experts will form the basis of the expert panel that will assess gifts made to the nation under the new scheme. Both schemes will share the annual limit that has been available to date for the existing IHT AIL scheme (currently set at £20m per year, so not a worry for most people!).
At present the scheme is up for consultation, but with the proviso that some aspects will not change, such that the new scheme will apply to items that are donated to the nation and will operate within an annual limit. The tax reductions offered under the new scheme will be equal to a set percentage of the value of the object being donated. It will only apply to pre-existing objects and will not cater for, for example, commissioning the creation of new objects. Finally, the new scheme will be limited to chattels (moveable objects), given that donors may already claim income tax relief or corporation tax relief on gifts to charities of land and buildings.