{{Short description|Provision in British tax law}} {{Use dmy dates|date=January 2015}} {{Use British English|date=January 2015}} [[File:Millais Royalist.jpg|thumb|[[The Proscribed Royalist, 1651|''The Proscribed Royalist'']] by [[John Everett Millais]] was acquired by the government through the scheme in 2009<ref>{{cite web|title=Acceptance in lieu : recent acquisitions of British museums|url=http://www.thearttribune.com/Acceptance-in-lieu-recent,654.html|work=The Art Tribune|accessdate=5 November 2011}}</ref> ]]
'''Acceptance in lieu''' (AiL)<ref name=dcms/> is a provision in British tax law under which [[inheritance tax]] debts can be written off in exchange for the acquisition of objects of national importance. It was originally established by [[Chancellor of the Exchequer]] [[David Lloyd George]] as a means for the wealthy to pay the increased estate taxes imposed by his [[People's Budget]] of 1909 but had its roots in similar schemes dating to the late 19th century. It has developed from the early years, when it was used mainly as a means for the aristocracy to dispose of country estates to the [[National Trust]], to the modern day, when it is more associated with the transfer of works of art, antiquities and archive material to museums. The scheme is administered by [[Arts Council England]], a [[non-departmental public body]] of the [[Department for Culture, Media and Sport]]. The scheme has brought many houses, works of art and other collections into publicly accessible institutions when they would otherwise have gone to auction. In April 2013 the Cultural Gifts Scheme was started which allows taxpayers to make a donation of art in return for a credit on income tax, capital gains tax or corporation tax. The Cultural Gifts Scheme is also administered by Arts Council England and is reported jointly with the Acceptance in Lieu scheme.<ref>{{cite web|title=Cultural Gifts Scheme|url=http://www.museumsassociation.org/campaigns/museums-and-tax/cultural-gifts-scheme |publisher=Museums Association|accessdate=21 September 2017}}</ref>
== History == [[File:AILvaluesgraph.png|thumb|270px|Graph of tax settlement values (red), total object values (blue) and number of cases (green), 2001–16. Includes Cultural Gifts Scheme objects since 2013]]
With increasing [[Inheritance Tax (United Kingdom)|Death Duty]] (later known as estate duty, capital transfer tax and inheritance tax) being levied on the wealthy in the late 19th century many were forced to sell off their large country houses and estates to pay for their tax liabilities.<ref name=mla2010/> This often resulted in unique family collections of antiques and works of art being lost and dispersed.<ref name=mla2010/> The 1896 [[Finance Act]] sought to limit the damage by exempting nationally important works of art from taxation and was strengthened by the 1903 establishment of the [[National Art Collections Fund]] which sought to acquire important paintings for the nation.<ref name=mla2010/> Houses and collections continued to be sold however and [[David Lloyd George]]'s [[People's Budget]] of 1909, with its increased land and estate taxes, would have worsened matters.<ref name=mla2010>{{cite web|title=Acceptance in Lieu Report 2009/10 |url=http://www.mla.gov.uk/what/cultural/tax/~/media/Files/pdf/2010/AELU/MLA_acceptance_in_lieu_report_2009_2010 |publisher=Museums, Libraries and Archives Council |accessdate=5 November 2011 |url-status=dead |archiveurl=https://web.archive.org/web/20111123133557/http://www.mla.gov.uk/what/cultural/tax/~/media/Files/pdf/2010/AELU/MLA_acceptance_in_lieu_report_2009_2010 |archivedate=23 November 2011 }}</ref> However Lloyd George made a provision in the [[Finance Act#Finance Act 1910|Finance Act 1910]] for the creation of the Acceptance in Lieu scheme to allow land to be given to the nation in lieu of Estate Duty.<ref name=mla2010/>
The scheme was little used in its early years owing to the disruption of the First World War and the [[HM Treasury|Treasury]]'s insistence that any shortfall in tax caused by the scheme was made up by reductions in the budget of a government department.<ref name=mla2010/> The government made it easier for country estates to be given to the nation in the [[National Trust]] Act of 1937 and the Finance Act of 1953, which allowed for the contents of houses to be transferred also.<ref name=mla2010/> The years after World War II saw a large number of houses given to the nation in this manner and brought into the custody of the National Trust.<ref name=mla2010/> A minor scandal erupted in 1977 when the Treasury refused to accept the late [[Harry Primrose, 6th Earl of Rosebery|Lord Rosebery]]'s [[Mentmore Towers|Mentmore]] house in lieu of £2 million of inheritance tax, seeing it instead sold at public auction for £6.25 million and enter private hands.<ref name=mla2010/> As a result, new guidelines for the scheme were introduced by the 1980 [[National Heritage Act]].<ref name=mla2010/>
Conservative [[Minister for the Arts (United Kingdom)|Minister for the Arts]] [[Grey Ruthven, 2nd Earl of Gowrie]] provided a guaranteed allocation of £10 million a year (later increased to the present level of £20 million) from the Treasury reserves to make up the tax revenue shortfall arising from objects received for the nation.<ref name=mla2010/> Having originally been associated mainly with the acquisition of country estates for the National Trust by the late 20th century the scheme was becoming known more for accepting works of art and archival material for national, regional and local collections.<ref name=mla2010/> This is due to a decline in inheritance tax levels from 75% in 1975 to 40% by 1988, rising artwork prices and more effective tax arrangements made by the owners of large, historic houses.<ref name=mla2010/> Since 1984 only one country house has been given to the nation through the Acceptance in lieu scheme, this being [[Seaton Delaval Hall]] which was allocated to the National Trust in 2009.<ref name=mla2010/> The scheme continues to provide a valuable means of preserving national treasures and has provided objects worth £140 million to public collections in the five years following 2006.<ref name=parliament>{{cite web|title=Memorandum submitted by the Acceptance in Lieu Panel|url=https://publications.parliament.uk/pa/cm200506/cmselect/cmcumeds/912/912we03.htm|publisher=House of Commons|accessdate=5 November 2011}}</ref> Though the National Trust is still a large recipient of assets, receiving more than £21 million worth in 2000–10, objects are allocated to a wide variety of institutions of all levels across the country and there are few major public collections that have not received a donation from the scheme.<ref name=mla2010/>
== Procedure == The current legislation under which the scheme is established is Section 230 of the Inheritance Tax Act 1984.<ref name=parliament/> The scheme applies to works of art, manuscripts, heritage objects and historic documents. In addition items must be in an acceptable condition and of "particular historical, artistic, scientific or local significance, either individually or collectively, or associated with a building in public ownership, such as a National Trust property, which will be expected to have public access for at least 100 days each year".<ref name=mlaguide>{{cite web|title=Acceptance in Lieu Guidance Notes |url=http://www.mla.gov.uk/what/cultural/tax/~/media/Files/pdf/2009/AIL_Guidance_Notes_10647_at_12_10_09 |publisher=Museums, Libraries and Archives Council |accessdate=5 November 2011 |url-status=dead |archiveurl=https://web.archive.org/web/20111123134908/http://www.mla.gov.uk/what/cultural/tax/~/media/Files/pdf/2009/AIL_Guidance_Notes_10647_at_12_10_09 |archivedate=23 November 2011 }}</ref> Different rules apply to manuscripts and archive material which must have "an especially close association with our history and national life", "especial artistic or art-historical importance", "especial importance for the study of some particular branch of art, learning or history" or "an especially close association with a particular historic setting".<ref>{{cite web|title=Acceptance in Lieu|url=http://www.nationalarchives.gov.uk/information-management/our-services/acceptance-lieu.htm|publisher=National Archives|accessdate=5 November 2011}}</ref>
Approval of potential cases lies with the [[Secretary of State for Culture, Media and Sport]] or the relevant ministers in the devolved Scottish and Welsh governments (where applicable).<ref name=mlaguide/> The minister is advised on the acquisition of an item by a panel of experts from [[Arts Council England]] in most cases (the Historical Manuscripts Commissioner at [[The National Archives (United Kingdom)|The National Archives]] advises on manuscripts).<ref name=mladef>{{cite web|title=Acceptance in Lieu |url=http://www.mla.gov.uk/what/cultural/tax/acceptance_in_lieu |publisher=Museums, Libraries and Archives Council |access-date=5 November 2011 |url-status=dead |archiveurl=https://web.archive.org/web/20111015061311/http://www.mla.gov.uk/what/cultural/tax/acceptance_in_lieu |archivedate=15 October 2011 }}</ref><ref>{{cite web|title=Acceptance in Lieu |url=http://www.artscouncil.org.uk/about-us/museums-and-libraries/cultural-property/tax-incentives/acceptance-lieu/ |publisher=Arts Council England |accessdate=6 November 2011 |url-status=dead |archiveurl=https://web.archive.org/web/20111020160823/http://www.artscouncil.org.uk/about-us/museums-and-libraries/cultural-property/tax-incentives/acceptance-lieu/ |archive-date=20 October 2011 }}</ref> Until its abolition in October 2011 the [[Museums, Libraries and Archives Council]] provided the advising panel.<ref name=mladef/> The panel assesses the open market value of an item and passes this to the minister who makes the final decision whether to accept it or not.<ref name=mlaguide/> The panel aims to provide an assessment of value that is fair to the offerer and the tax-payer.<ref name=parliament/>
Once accepted any items currently associated with buildings in public ownership are allowed to remain there, provided public access is available.<ref name=mlaguide/> If they are associated with a private building they may be granted to a public museum but lent back to the house-owner providing public access and security can be maintained.<ref name=mlaguide/> This arrangement allows for unique collections (such as the contents of country estates) to remain intact and not be dispersed or separated from their associated historic buildings. Other items might be allocated by the minister to a museum or gallery at no cost, particularly where the offerer has requested a specific institution be assigned the item.<ref name=mladef/> Other items are advertised to museums who are invited to apply for their allocation.<ref name=mladef/> In cases where the value of an item exceeds the tax settled the institution receiving the item will pay the difference to the offerer.<ref name=mlaguide/>
Due to certain tax benefits an item offered under the Acceptance in Lieu scheme is worth 17% more to the offerer than if the item was sold at public auction.<ref name=mlaguide/> This makes the scheme a particularly attractive alternative and has been described by the government as "the most important means of acquiring important works of art and cultural objects for public ownership".<ref name=dcms>{{cite web|title=Acceptance in Lieu|url=http://www.culture.gov.uk/what_we_do/cultural_property/3292.aspx|publisher=Department for Culture, Media and Sport|accessdate=5 November 2011}}</ref> Some criticism of the scheme has focussed on its failure to provide for settlement of "everyday" taxes such as income tax such as occurs in France, Ireland and Australia.<ref>{{cite web|last=Hall |first=Michael |title=Thoughts on Acceptance in Lieu |department=''Muse'' (''Apollo Magazine'' blog) |date=11 December 2008 |url=http://www.apollo-magazine.com/muse/3079851/thoughts-on-acceptance-in-lieu.thtml |accessdate=5 November 2011 |url-status=dead |archiveurl=https://web.archive.org/web/20110928005114/http://www.apollo-magazine.com/muse/3079851/thoughts-on-acceptance-in-lieu.thtml |archive-date=28 September 2011 }}</ref>
<gallery widths="155px" heights="200px"> File:Dreamofhumanlife.jpg|''The Dream'', one of Michelangelo's finest drawings, was accepted in 1981 and allocated to the [[Courtauld Institute of Art]]<ref name=mla2010/> File:Anadyomene.jpg|Titian's [[Venus Anadyomene (Titian)|''Venus Anadyomene'']] was allocated to the [[National Galleries of Scotland]] in 2003<ref name=mla2010/> </gallery>
== References == {{Reflist}}
[[Category:British art]] [[Category:Taxation in the United Kingdom]]