Relief from both Inheritance Tax and Capital Gains Tax is available to owners of heritage property providing that claimants and successive owners enter into certain undertakings. As part of these undertakings claimants are expected to complete a Heritage Management Plan which requires the retention of the heritage property, and the management of it, to be conducted in accordance with agreed objectives.
The Government recognises that significant buildings, land and objects are important to the UK’s cultural life and these heritage assets should be conserved and protected for the benefit of the community whilst remaining in private hands as far as possible. Inheritance taxation of 40% on capital assets may result in heritage assets being sold. To prevent this, Inheritance Tax legislation provides for Heritage Relief.
The following may qualify for Heritage Relief:
- land of outstanding scenic, historic or scientific interest
- buildings of outstanding historic or architectural interest
- land essential for the protection of such a building
- objects historically associated with such a building
HMRC will seek advice from Natural England for outstanding land and from English Heritage for outstanding buildings, designated historic sites and historically associated objects.
A claim for conditional exemption must normally be made within two years after the occasion giving rise to the tax charge, which in most cases means the death of the owner. The claim should be sent to HMRC in Nottingham. Should the request for conditional exemption be accepted, HMRC will require that the property be cared for and not allowed to deteriorate or lose the quality for which it was designated in the first place; and the public must have reasonable access to the property. The property owner must provide a Heritage Management Plan, which must be approved by the relevant Agencies and then submitted HMRC.
