The government will increase the amount of tax relief available to people who donate to the nation historical and cultural objects from £30m to £40m a year in 2014/15.
The Budget document, published by the Treasury alongside Chancellor George Osborne’s speech to parliament today, says that the government will increase the amount of relief available under the Cultural Gifts Scheme, which gives a tax reduction of 30 per cent of an object’s value to individuals and 20 per cent to corporations.
The scheme, which was announced in the government’s 2011 Autumn Statement, shares its budget with the Inheritance Tax Acceptance in Lieu Scheme, which allows people to offer items of cultural and historic importance in full or part payment of their inheritance tax.
Both schemes are administered by Arts Council England.
The first gift made under the Cultural Gifts Scheme, letters and handwritten Beatles lyrics given to the British Library, was processed last year.
The government announced in the Autumn Statement last year that there would be an amendment to legislation related to the CGS to ensure donors were not better off than they would be selling their objects on the open market.
As the law stands, CGS donors may avoid paying estate duty, which can be up to 80 per cent. The intention of the law was that up to 40 per cent – the top level of inheritance tax – could be avoided. The amendment will ensure that anything over 40 per cent is charged, a note from HM Revenue & Customs says.
Philip Spedding, director of Arts and Business, which develops public and private sector relationships with the arts sector, says the increase in the total cap was welcome, but the amendment to close the loophole was "not ideal but probably fair" because it would lower the financial incentive for some people.
Alan Davey, chief executive of Arts Council England, said he hoped the extension to the amount available would "stimulate an increase in items coming into the public domain for more to enjoy".