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The Acceptance in Lieu (AIL) scheme, a key element in the government's strategy to ensure that the most important of the nation's cultural objects remain within the UK and become accessible to the public, is one of the most successful ways of utilising the generosity of the Treasury. It was introduced by section 56 of the Finance (1909–10) Act 1910, which came into force on 29th April of that year.

The Capture of Havana, 1762: Storming of Morro Castle, 30 July

The Capture of Havana, 1762: Storming of Morro Castle, 30 July 1770–1775

Dominic Serres (1722–1793)

National Maritime Museum

It provides a means for private property to come into public ownership at no direct cost to the museum or gallery which becomes the new owner. It is not a gift, rather it is simply a method of paying tax by a form of barter rather than by cash or cheque. It allows those who have a liability to Inheritance Tax (or one of its earlier incarnations) to pay their tax liability by means of transferring ownership of a cultural or historic object, an outstanding building or land to the nation.

The Champion: Venus

The Champion: Venus 1819

Edwin Henry Landseer (1802–1873)

Russell-Cotes Art Gallery & Museum

The nation then gives it to a suitable body which will own it for the public benefit. Effectively it gives museums and galleries an increase in their purchasing capacity. Last year, objects worth just under £60 million were allocated to museums, galleries and archives within the UK. Over the last 10 years, the amount totalled £378 million.

On the Seine – Morning

On the Seine – Morning c.1825

Richard Parkes Bonington (1802–1828)

The National Gallery, London

There are few major museums or galleries in this country which have not benefited from the scheme. A rare landscape painted by Richard Parkes Bonington in about 1825 now hangs in The National Gallery.

Peggy Ashcroft as Miss Hardcastle

Peggy Ashcroft as Miss Hardcastle c.1933

Walter Richard Sickert (1860–1942)

University of Bristol Theatre Collection

A portrait of Peggy Ashcroft as Miss Hardcastle by Sickert found a permanent home in Bristol.

Geraniums and Carnations

Geraniums and Carnations c.1938

Eric Ravilious (1903–1942)

Fry Art Gallery

A watercolour titled Geraniums and Carnations by Eric Ravilious was secured for the Fry Art Gallery in Saffron Walden, and a Vuillard, Modèle assise dans un fauteuil, se coiffant, for Pallant House in Chichester.

The scheme is beneficial for offerors, because a greater proportion of the value of the item being offered can be applied to paying the tax bill than if the same item was sold and the proceeds applied to discharging the tax liability. If a painting valued at £100,000 is sold to raise cash to pay a tax bill, the taxman takes 40% of the proceeds, leaving only £60,000. The same painting offered in lieu settles £70,000 of tax. In addition, in negotiating the AIL value, the costs are normally less than those incurred in auction fees and in agreeing what is a fair market price, buyer's premium is taken into account with the value of this benefiting the offeror and not the auctioneers.

Any single item, collection or group can be offered as long as it is of pre-eminent heritage quality, like the John Christian collection of drawings and watercolours now at the British Museum, among which was the lost Rossetti watercolour The Death of Breuse San Pitié.

1857 (retouched 1865), watercolour by Dante Gabriel Rossetti (1828–1882)

The Death of Breuze Sans Pitié

1857 (retouched 1865), watercolour by Dante Gabriel Rossetti (1828–1882)

Objects that are not pre-eminent but which are, or have been, kept in a building that is owned either by the government or by a heritage organisation, such as the National Trust, can also be accepted. Such associated chattels must make a significant contribution to the decoration or understanding of the property within which they are located. Since 2004, 55 paintings have been accepted as associated with the National Trust's Penrhyn Castle in Wales and many other NT properties have been enriched through AIL.

Valuation is the issue where an offer may be contentious and some are put off offering items in lieu because they consider that they would thereby lose the chance to test the open market. The AIL Panel, which advises Ministers on the quality and value of items offered, has a duty to do justice to both the offeror and to the nation. It has no intention of seeking a bargain which undervalues the object being offered. Where genuine differences of opinion arise about the merits of an item the Panel is happy, if requested, to convene a meeting between its experts and the offeror and his or her advisers. The number of offers that fail because negotiations on valuation break down is very low. If the Panel considers the offer price an undervaluation it will advise the offeror, who is invited to raise the offer price.

Weeping Woman (Femme en pleurs)

Weeping Woman (Femme en pleurs) 1937

Pablo Picasso (1881–1973)


A variation on the straightforward offer in lieu is the so-called 'hybrid' offer. This concept was invented many years ago, when Picasso's Weeping Woman was under threat of sale. The painting's value would have satisfied considerably more tax than was payable. Then, as now, there was no provision for HMRC to accept a part share of an item or offer 'change' to the offeror. As HMRC did not have the power to make good the difference the solution was for the Tate, on whose desiderata list the picture had long been, to pay the difference. In return, the estate named the Tate the conditional allocatee of the painting. In that case the Tate, with the help of funding bodies, paid the difference to ensure that the estate did not suffer financially.

With prices for important works of art spiralling and sophisticated tax planning being available, hybrid offers of this sort, often with the payment of the excess being spread over two or even three years, depending on what the offeror is prepared to agree with the participating institution, have become an increasingly important and vital tool in museums' efforts to acquire the very best works of art. In 2019 Leicester secured Hogarth's conversation piece of the Wollaston family by such a hybrid deal.

William Wollaston and his Family in a Grand Interior

William Wollaston and his Family in a Grand Interior 1730

William Hogarth (1697–1764)

Leicester Museums and Galleries

Acquiring important objects and collections, whether historic or contemporary, is the lifeblood of museums. Schemes such as AIL are vital to this and to lessening the flow of our heritage abroad. It is the most important means of acquiring great works of art and other important items for public ownership.

As David Lammy said in the House of Commons in 2006 (Hansard, 11/10/06, column 421) 'it is in nearly every way the holy grail of public policy. Absolutely everybody is a winner under the scheme.' So, when the tax opportunity arises, please consider making use of the scheme.

Anastasia Tennant, Senior Policy Adviser, Collections and Cultural Property, Arts Council England