Policy paper

Statement of Practice 11 (1984)

Published 1 November 1984

Under the estate duty provisions, an object which in the opinion of the Treasury was of national, scientific, historic or artistic interest could be exempt from duty if undertakings were given to preserve it and keep it in the UK. If an object which had been exempted from duty was subsequently sold (unless the purchaser was a national institution or similar body), or if the undertaking was broken, duty became chargeable, generally either on the sale proceeds or on the value of the object at the date of the charge. These ‘clawback’ charges may still apply now in relation to objects which have previously been exempted from estate duty.

Estate duty applied not only to property passing on death but also to property given away by the deceased within a certain period before his death. In these latter cases the duty chargeable could be reduced by a taper relief (Finance Act 1960 section 64). The exemption described in the preceding paragraph could also apply to an object which came within the charge to duty because it was the subject of an inter vivos gift. The Commissioners for HM Revenue and Customs have been advised that in these circumstances taper relief under section 64 is not available to reduce the amount liable to the clawback charge, and that the amount chargeable to duty is the full value or sale proceeds.