IHTM21048 - Valuation and technical issues: conditional exemption

Successive governments have taken the view that, amongst other things, chattels of national, artistic, historic or scientific interest form an integral and major part of the cultural life of this country. Their view has been that this national heritage should be conserved and protected for the benefit of the nation as a whole.

Their view has been that, so far as possible, property of this kind should remain in private ownership and that those owners should be encouraged to retain and care for the property and display it to the public.

IHTA84/S30 -35 gives effect to this policy of encouragement by enabling transfers to be conditionally exempt from IHT as long as

• the property transferred is designated by HMRC as of national, etc interest; and
• an appropriate person, usually the new owner, gives undertakings to preserve the property, allow reasonable public access and keep it in the UK.

The exemption is described as conditional because there is normally a tax charge if the undertakings are broken or the property is sold or given away.

If you receive any claim for conditional exemption, please refer the file to Heritage for advice. You should also refer to Heritage if the taxpayer discloses that any particular chattel included in the estate was conditionally exempt on a previous death.

If the taxpayer offers any chattel in lieu of tax, please refer the file to Heritage.