Unwrapping our gifts
Having accepted no fewer than 13 gifts to the nation of outstanding works in 2015–16, the Cultural Gifts Scheme has come of age. Michael Hall reviews its growth since it began in 2013 and highlights some of its recent successes
FOR the past 25 years, students studying history of art at University College London (UCL) have been the beneficiaries of a remarkable teaching aid in the form of 610 political caricatures and other prints made in the 18th and 19th centuries. As well as works by Hogarth, Gillray (Fig 3), Rowlandson and Daumier, there is a fine group of French revolutionary caricatures. Put together out of his own pocket by David Bindman, Emeritus Durning-lawrence Professor of the History of Art, the prints were lent to the college’s Art Museum, where they have been used for exhibitions as well as classes.
Last year, it was announced that UCL had acquired the entire collection, after Prof Bindman had offered it to the nation through the Government’s Cultural Gifts Scheme (CGS), in which donors are offered a tax reduction in return for important works of art and other cultural objects. These prints are just one of the astonishingly varied gifts made last year under the scheme, which, in the four years since it was opened, has become an outstandingly important source of acquisitions for our museums, galleries and historic houses.
Although only recently established, the idea of CGS goes back a long way. For many years, it has been possible to offer important works in lieu of capital taxes through the ‘Acceptance in Lieu’ (AIL) scheme. AIL enables taxpayers to transfer such works into public ownership while paying Inheritance Tax (or one of its earlier forms). In almost all cases, therefore, the offer takes place after a death. In other countries, notably the USA and Australia, similar tax concessions are offered for lifetime gifts and there was long-standing pressure in the UK for such a scheme to be initiated here.
In 2003, the Treasury commissioned Sir Nicholas Goodison to write a review on how the system of government support for private giving to museums might be improved. Published in 2004, the review recommended, among much else, the introduction of a tax concession for lifetime gifts. The result was a deafening silence. The Treasury never made a formal response to the review and, at least once a year, COUNTRY LIFE published an editorial or an article demanding to know why this recommendation hadn’t yet been implemented.
In the end, we had to wait until the Budget of 2012 for George Osborne to unveil CGS, which opened for business in March 2013. Almost at once, it grabbed the headlines, with the gift from Hunter Davies of letters and lyrics by John Lennon, which were acquired by the British Library. Since then, the number of gifts has almost doubled every year. In 2015–16, 13 offers were accepted and allocated to museums and galleries all over the country.
How does CGS work? It allows individuals to set 30% of the value of a ‘pre-eminent’ work against either Income Tax or Capital Gains Tax. If the value of the tax reduction generated by the gift exceeds the tax liability in any one year, the reduction can be spread over up to five years. The factors that are taken into consideration in deciding whether or not an item is ‘pre-eminent’ are the closeness of its association with our history and national life; its level of artistic or art-historical interest; its importance for the study of some particular form of art, learning or history; or the closeness of its association with a particular historic setting. If the object is judged pre-eminent on one of these four criteria, it can qualify for the scheme.
This approach to the question of ‘preeminence’ is taken from AIL and the two schemes, which are both administered by the Arts Council, run in parallel. Offers under both are assessed by the same panel, currently chaired by Edward Harley, which makes its recommendations to the Secretary of State for Culture, Media and Sport and ministers in the devolved nations. The schemes have a single budget: in any one year, the amount of tax that may be written off under AIL
Fig 2: A silver matrix of the Great Seal of Queen Victoria, set into a dish made by Elkington in Bristol in 1878, as a gift from the Queen to the Lord Chancellor, the 1st Earl Cairns. The 6th Earl Cairns has given it to the nation through the Cultural Gifts Scheme
Fig 1: A mid-16th-century giltbronze writing casket attributed to the Grandi workshop in Padua. Now in the Ashmolean Museum, Oxford, it was given by Daniel Katz Ltd and was the first offer under the Cultural Gifts Scheme from a company