Tax breaks for British collectors

Owners of Britain’s most precious art treasures have flocked to take advantage of a loophole that has saved them more than £1 billion in inheritance tax.

An additional 10,000 paintings, sculptures and mementos have been added to the register since Labour promised to stop the “abuse” of the system. It previously held 15,000 items.

But the scheme, which offers tax breaks to private owners of works by Renoir, Constable and Van Dyck if they admit the public to view the art, is now in disarray. Some owners have not admitted a single visitor since Labour tightened the rules.

Tessa Jowell, the culture secretary, is known to be “very concerned” at the antics of some owners, who enjoy the tax breaks at public expense while the British Museum suffers a financial crisis. “The credibility of the scheme depends upon public confidence that it is operated in a fair and entirely open way,” said a source.

One collection of four oils and watercolours by Wassily Kandinsky, the modernist, was spared a six-figure tax bill when it was registered in 1998. The collector agreed to make them available to any member of the public who applied. Only one did. “It was someone with a museum background and I understand he and my client had a very nice afternoon,” said Nicholas Parnell, the unnamed collector’s adviser. The works have, however, been loaned to exhibitions.

Some collections have attracted so little interest that the £1 billion tax relief granted since 1986 is equivalent to a five-figure sum per visitor.

Despite the bash-the-rich tone of the article, it seems rather unfair to blame the beneficiaries for what appears to be a rather badly thought out government program. From the Sunday Times.

Posted by David on January 18, 2003 9:57 PM