Almost 40 paintings by Sir Winston Churchill have been offered to the nation in lieu of inheritance tax (IHT).
Sir Winston’s youngest daughter Lady Mary Soames, who died aged 91 in May, requested in her will that the 38 paintings remain at the Churchill family home, Chartwell in Kent, where they have been on public display since 1966.
The BBC reported on 8 October: “The Churchill family has offered the pictures to the nation in lieu of inheritance tax. A decision by the government on whether it will accept this deal is expected next year.”
Inheritance tax is payable at a rate of 40 per cent on any estate valued at above £325,000 but under the government’s Acceptance in Lieu (AiL) scheme, taxpayers can donate items of cultural and historical importance to the nation in full or part payment of IHT bills of up to £30 million. Donated items are held in public ownership and passed on to UK museums, galleries and public archives.
The government says: “The scheme offers clear tax benefits to owners. Items are generally worth around 17 per cent more if offered in lieu of tax than if sold on the open market at the same price. This is because tax must be paid on the selling price.”
In 2012-13, the value of items donated through AiL had a record commercial value of £49.4 million
Tim Steele, a partner in Palmers’ Wills, Trusts and Probate department, said: “While the Acceptance in Lieu scheme will only apply to a limited number of people, it does highlight the fact that there are many different opportunities to reduce future inheritance tax bills.
“Seeking early advice on IHT planning is the best approach and working with professionals experienced in this specialist field is an essential step for anyone seeking to protect their estate for the benefit of their beneficiaries. For more information, please contact our Wills, Trusts and Probate team.”