Tax relief opportunities

This information summarises the tax-relief opportunities you should look at when you are buying from private owners. At the foot of this page is a list of useful names and addresses, including organisations you can apply to for funding.

As a public organisation, we have to make sure that the people who receive our grants buy land or heritage items at a reasonable price, so we expect you to have looked at the tax-relief opportunities before you apply to us. We also strongly recommend that you speak to the Capital Taxes Office or to the Museums, Libraries and Archives Council (MLA), whose addresses are given here.

Private treaty sales

If you are an organisation who is listed in Schedule 3 of the Inheritance Tax Act 1984, which includes many of our possible applicants, you may be able to negotiate buying land or heritage items from private owners for a lower price than on the open market. This is because of the tax-related incentives available to owners. These sales help public organisations to buy items they might not otherwise be able to afford, or to be able to compete on the open market at short notice.

A private treaty sale is an agreement between a person and a public organisation for the sale of land and items that are of a particular quality and are important to our heritage. This ‘special’ sale is free of inheritance tax and capital gains tax, which may be more than 40% of the total price. As a key part of the sale, the Capital Taxes Office then apply what is know as the ‘douceur’, which is normally 25% (for items and collections) or 10% (for land or buildings) of the tax liability, to achieve the agreed net sale price. But the sale will depend on a fair valuation. The item’s tax history is also an important part of the sale. If you have the chance to buy land or items that are relevant and of interest, you should do the following.

  • Make sure that the land or heritage item is of a high enough quality to qualify. If necessary, get the advice of a relevant statutory agency (see the list of addresses)
  • Get your own independent valuation from a reputable valuer to make sure you agree a gross price with the owner, which is not more than the open market value of the land or item
  • Make sure the owner has had professional advice to work out the correct figures for the proposed sale; has checked the douceur has been worked out correctly, and has approved the agreed figure with the Capital Taxes Office

Acceptance in lieu’ and ‘hybrid’ arrangements

This is a scheme where important heritage items can be given to a public organisation in whole or part settlement of inheritance tax or one of its earlier forms. In most cases important works can go into public collections without the need to use the resources of funding organisations.

In a few cases, the object being offered in lieu can settle a larger amount of tax that is actually payable. In these cases you may be asked by the offeror to pay the difference between the actual liability of the offering estate and the amount of tax that could potentially be settled by the acceptance of the item.

Where an offer in lieu requires additional funding from the body that is to receive the item it is now commonly called a ‘hybrid arrangement’. If you are involved in such circumstances, we strongly recommend that you consult the Capital Taxes Unit of MLA: The Council for Museums, Archives and Libraries.

The offer in lieu transaction is negotiated on behalf of the Inland Revenue by MLA’s Acceptance-in-Lieu Panel, who make recommendations to the appropriate Minister after arranging the following.

  • Expert advice on whether it really is an important heritage item
  • An open market valuation (which becomes the ‘special price’ once the douceur has been applied)
  • Agreeing with everyone involved on which public institution would be suitable to receive the item

Once the offer has been given approval, it is then possible to establish the level of additional funding which will reflect the normal tax remission which is calculated in the same as if the item was being acquired by private treaty sale.

Suggested funding sources and useful contacts

British Film Institute

21 Stephen Street
London W1P 1LN
Phone: 020 7255 1444

British Library National Manuscripts Conservation Trust

The National Preservation Office
British Library
96 Euston Road
London NW1 2DB
Phone: 020 7412 7048


Crown Building
Cathays Park
Cardiff CF10 3NQ
Phone: 02920 500 200

Countryside Agency

John Dower House
Crescent Place
Cheltenham GL50 3RA
Phone: 01242 521 381

Countryside Council for Wales, Cyngor Cefn Gwlad Cymru

Las Penrhos
Ffordd Pendhos
Gwynedd LL57 2LQ
Phone: 01248 370 444

Cymal – Cymru Museums, Archives & Libraries

Unit 10
Science Park
Aberystwyth SY23 3AH
Phone: 01970 610 235

Department of the Environment, Northern Ireland Environment and Heritage Service – Natural Heritage

Commonwealth House
35 Castle Street
Belfast BT1 1GH
Phone: 02890 251477

Department of the Environment and Heritage Service – Built Heritage

5 to 33 Hill Street
Belfast BT1 2LA
Phone: 02890 251 477

English Heritage

London W1S 2ET
Phone: 020 7973 3000

English Nature

Northminster House
Northminster Road
Peterborough PE1 1UA
Phone: 01733 455 000

Esmee Fairbairn Foundation

11 Park Place
London SW1A 1LP
Phone: 020 7297 4700

European Commission

46 to 48 Mount Pleasant
Liverpool L3 5SD
Phone: 07000 382 543

Foundation for Sport and the Arts

Sportech House
2 Enterprise Way
Liverpool L13 1FB
Phone: 0151 259 5505

Groundwork UK

85 to 87 Cornwall Street
Birmingham B3 3BY
Phone: 0121 236 8565

Historical Manuscripts Commission

Quality House
Quality Court
Chancery Lane
London WC2A 1HP
Phone: 020 7242 1198

Historic Scotland

Longmore House
Salisbury Place
Edinburgh EH9 1SH
Phone: 0131 668 8600

Inland Revenue Capital Taxes Office

Heritage Section
Ferrers House
PO Box 38
Castle Meadow Road
Nottingham NG2 1BB
Phone: 0115 974 2490

MLA/V&A Purchase Grant Fund

Victoria and Albert Museum
Cromwell Road
London SW7 2RL
Phone: 020 7942 2538

National Art Collections Fund

Millais House
7 Cromwell Place
London SW7 2JN
Phone: 020 7225 4800

National Fund for Acquisitions

National Museum of Scotland
Chambers Street
Edinburgh EH1 1JF
Phone: 0131 247 4106

National Library of Scotland

George IV Bridge
Edinburgh EN1 1EW
Phone: 0131 226 4531

National Library of Wales

Ceredigion SY23 3BU
Phone: 01970 362 800

Northern Ireland Museums Council

6 Crescent Gardens
Belfast BT7 1NS
Phone: 02890 550 215

Pilgrim Trust

Fielden House
9 Little College Street
London SW1P 3SH
Phone: 020 7222 4723

Scottish Museums Council

County House
20/22 Torphichen Street
Edinburgh EH3 8JB
Phone: 0131 229 7465

Scottish Natural Heritage

12 Hope Terrace
Edinburgh EH9 2AS
Phone: 0131 229 7465

Wolfson Foundation

8 Queen Anne Street
London W1G 9LD
Phone: 020 7323 5730