You might have things that are important to the country or have scientific, historical, or artistic value. This could be art, books, old documents, land, or scientific items.
If you have these kinds of things, you might want to think about leaving them to the country in your will. This could help with a program called the Acceptance in Lieu (AiL) scheme.
What is the AiL scheme?
The AiL scheme is a way for people who owe Inheritance Tax (IHT) to pay it by giving important items to the country. These items then go to public collections to keep our cultural heritage alive.
A group called the Acceptance in Lieu Panel decides how much these items are worth. If they accept the items, the value of the items is considered as tax paid.
Also, the total amount of tax your heirs have to pay might be less, because the value of the item is taken out of your estate’s worth.
To use the AiL scheme, you have to say so in your will. The total amount of tax that can be reduced by this scheme is £30 million.
The Cultural Gifts Scheme
The Cultural Gifts Scheme is another way to get a tax break when you give stuff to the public. This doesn’t include land, though. Like the AiL scheme, the Acceptance in Lieu Panel decides how much the stuff is worth.
However, this scheme is for gifts you give while you’re still alive. When you give the gift, you get a tax break that matches the value of the item. This tax break can be spread over five years. Once you’ve given it to the public, it won’t be part of your estate when you die, so it won’t be taxed.
Before you decide to give these items to the country, it is important to understand how it will affect your estate and the people who will inherit from you, as well as any taxes they might have to pay.
These decisions can be complicated, so it is a good idea to talk to a tax advisor who knows can give expert advice.
Our experts in Wills and estates can help you plan your taxes, please contact us today for further information.