Call for stringent checks on tax-free art treasures
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Your support makes all the difference.TOUGHER checks are needed on whether the public has access to hundreds of millions of pounds worth of art treasures which have been exempted from inheritance tax, the National Audit Office said yesterday.
Sir John Bourn, Comptroller and Auditor General, recommended that selective on-site inspections of paintings, furniture and other art treasures should be considered to ensure they still exist and are in good repair.
His report implies the Inland Revenue relies too heavily on owners for assurances that they still have the items, have maintained them, and made them accessible to the public - conditions on which exemption from 40 per cent inheritance tax is granted.
At present the main check is a five-yearly letter that undertakings are being honoured. That, however, does not require the items covered to be listed. Since 1986, tax amounting to an estimated pounds 555m has been foregone on art treasures, with another pounds 36m on land and buildings.
The report cites cases of one art treasure being sold for almost pounds 50,000 after assurances that it had not been; of a solicitor reporting that two chairs had 'disintegrated' six-and-a-half years after confirmation that all was well and of eight reminders since 1987 failing to produce confirmation from one owner that undertakings, made in 1982, were still being honoured.
Sir John notes that there is 'no independent verification that exempt items are still in the owner's possession and that the original undertakings on preservation and access are being observed'.
The report also acknowledges the fierce criticism over difficulties faced by the public in knowing what can be seen. Items which can only be viewed by appointment are listed in a register kept at the Victoria and Albert Museum in London, with copies in Edinburgh, Belfast and Cardiff. Many entries, however, do not reveal the owner's identity or the item's whereabouts. The Government is preparing plans to improve both accessibility and the register.
Sir John says less reliance should be placed on owners' assurances that all is well. On-site inspections should be considered and written assurances provided by agencies, backed up by checks on land and buildings where necessary, that the conditions on which exemption has been granted are being observed.
Inheritance Tax; NAO; House of Commons Paper 336; HMSO pounds 5.25.
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