A self-portrait by Lucian Freud is to go on display at the National Portrait Gallery after he left it to the nation in lieu of paying Inheritance Tax.
The unfinished portrait is thought to date from the mid-1980s and will settle £559,773 worth of tax through the gifting. This isn’t the only settlement to come from Freud’s estate; last year it emerged that an archive of sketchbooks, drawings and letters was accepted to cover £2.9 million worth of Inheritance Tax.
Freud’s estate has taken advantage of the Acceptance in Lieu scheme, which allows Inheritance Tax debts to be written off in the exchange for the acquisition of objects of national importance. The scheme has enabled many houses, works of art and other collections to be made publically accessible when they would have otherwise gone to auction. Freud’s collection is the biggest offer in the scheme’s history, which settled more than £16 million in tax.
To qualify for the Acceptance in Lieu scheme objects must be of national importance and in order to apply you need to prove to HM Revenue & Customs that the item is of sufficient rarity. HMRC would then undertake their own assessment, taking advice from the independent Acceptance in Lieu Panel of Arts Council England.
Tom Curran, Chief Executive at Kings Court Trust said: “While the Acceptance in Lieu scheme has helped to make Freud’s work more accessible to the masses, it’s unlikely to be a route that many ordinary people will be able to take advantage of.
It is vital to remember that when dealing with the Inheritance Tax owed on an estate, the executors are legally liable for all calculations and paperwork. Therefore, if you make a mistake the ramifications can be serious. At Kings Court Trust we deal with the whole estate administration process, including Inheritance Tax, on our client’s behalf. We take on full responsibility and liability so that they don’t have to worry; we also have a unique estate insurance policy which protects the family against any claims on the estate for ten years.”
For more information on Kings Court Trust’s comprehensive estate administration service, visit www.kctrust.co.uk or call our client services team on 0300 303 9000.