It is sometimes the case that a family cannot settle Inheritance Tax due on a relative’s death without selling parts of the deceased relative’s estate to the detriment of the family’s wider interests, often including the sale of a family home.

Where the estate contains items which are considered to be pre-eminent, however, those items may qualify for special treatment under the “acceptance in lieu” scheme.

The scheme allows a family to offer to pay in whole or in part an Inheritance Tax liability by giving a pre-eminent item or items to the nation in lieu of tax. The gift to the nation is treated by the Revenue as an effective tax payment and results in the gifted items being allocated to a public collection or institution for permanent exhibition to the general public.

Gifts in lieu of tax are subject to annual limits and not every item offered to the nation will be able to be accepted – it is crucial that families or executors wishing to explore a gift to the nation in settlement of an Inheritance Tax liability obtain specialist advice at the earliest opportunity. Our tax and succession team advises on gifts in lieu of tax and can often point to alternative approaches where a proposed gift cannot be accepted by the nation.