‘Hopeless’ UK database prevents public seeing tax-exempt artworks

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A UK government database that is supposed to allow the public access to artworks benefiting from tax exemptions is riddled with errors, including telling users to contact people who are dead or in jail.

Under the Conditional Exemption Tax Incentive scheme, owners of “objects with national scientific, historic or artistic interest” can avoid inheritance tax by guaranteeing HM Revenue & Customs that they will maintain the objects and make them available for the public to view.

There are more than 37,000 entries, ranging from paintings by Rubens and Pablo Picasso to a toast rack from 1900, most of which are meant to be available for viewing by appointment through a contact named in the database.

However, a sample of 100 items showed that, in most cases, getting access was difficult or impossible.

The contact information for a work by a 17th-century Flemish painter was for a lawyer who died in 2021, while the contact for a still life by Winston Churchill was an art dealer jailed in 2019 for defrauding clients of up to $30mn. One item on the database, a Meissen porcelain dish, was stolen in 2003, and at least four have been sold.

A lawyer responsible for administering their client’s exempt objects said the HMRC database was “hopeless”. Another said they had asked the tax authority to update their contact details when they moved firms, but HMRC had failed to do so.

Sarah Roller, director of policy and public affairs at Historic Houses, which has about 150 members who benefit from the scheme, said: “The database is truly something else . . . It looks like it was built at the start of the internet.”

HMRC estimated in December last year that the tax relief would cost the government £225mn between 2019-20 and 2024-25, suggesting objects worth £560mn had escaped inheritance tax over the period.

From the FT’s sample of 100 objects, only 44 contact details were correct or easily obtainable. Many of the entries carried the names of lawyers or administrators who had retired or the phone numbers and email addresses for businesses that had closed or changed.

When the contacts were correct or the right ones could be obtained, for instance by finding another solicitor at the same firm, owners proved willing to arrange access. Within a week, the FT had been offered appointments to view 36 items, including Jacobean wine glasses, a 19th-century manuscript and a pearl necklace given by Henry VIII.

One named contact said it was the first time he had been approached about an item and that it “puts me to some inconvenience” to make it available within the four weeks specified by government guidance.

Owners the FT spoke to said they were happy with the scheme, although several reported having received few or no enquiries.

Lord Ralph Lucas, whose exempt items include portraits by Sir Thomas Lawrence and Sir Joshua Reynolds, said: “We get occasional requests to see things and we do our best to make it easy for them.” He added that the scheme succeeded in keeping collections in historic houses, rather than being dispersed around the world.

A 1937 portrait by Picasso at Farleys House, former home of photographer Lee Miller and artist-historian Roland Penrose, is viewable on tours of the house, starting at £24, or on a private visit at £65 plus VAT.

The scheme has come into focus since Rachel Reeves’ Budget in October 2024, when the chancellor imposed inheritance tax on new classes of assets and diminished exemptions from it on others. The relief reduces an inheritance tax bill by removing valuable objects from the owner’s estate.

HMRC rejected a freedom of information request made by the FT in November 2024 to disclose the total value of assets accepted under the scheme, saying it held the information but it would be too costly to provide it.

As the contact address for nearly 4,000 items on the database, Arundel Castle in West Sussex, seat of the Duke of Norfolk, appeared to be the biggest user of the scheme.

HMRC said the scheme helped to “preserve and protect heritage assets”. It added: “Our database is continuously reviewed and updated monthly. Owners of heritage assets are required to provide a suitable reference for our database and inform us of any change in circumstances which might prevent public viewing. A tax charge will arise if exemption conditions are breached.”