Tax breaks may be used to boost art collections

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The author of a Treasury review on museums yesterday called for tax breaks for collectors who give important works of art to the nation.

Sir Nicholas Goodison, a former chairman of both the Stock Exchange and the National Art Collections Fund, said the tax relief, one of 45 recommendations, was vital to encourage an American-style culture of giving in Britain.

Announcing the results of his review, ordered last year by Paul Boateng, the Chief Secretary to the Treasury, Sir Nicholas issued a stark warning to Government that it had its priorities on museums and galleries wrong.

He said the emphasis on "access" and education was putting Britain's museums in jeopardy because it failed to recognise that museums were "nothing" without the treasures in their collections.

While his remit did not allow him to examine the issue of core funding, he said it was clear that the root of the problem lay in the chronic under-funding of national and regional museums.

The package of measures he recommended yesterday would help, he said, but must be implemented in their entirety if gaps in the collections of Britain's museums and galleries were to be filled.

The new tax relief would enable someone donating a work "of pre-eminent importance" to public collections during their lifetime to offset the gross value of the object against income before the assessment of income tax. The savings could be spread over several years.

Wealthy collectors have privately indicated to Sir Nicholas that this might encourage many to make donations which would help tackle lacunae in areas such as contemporary art. Sir Nicholas estimated that the measure would cost the Treasury around £30m.

He also called for a giant increase in the annual government grant to the National Heritage Memorial Fund, which is the fund of last resort for saving treasures for the nation, and was crucial in the purchase of the Tyntesfield estate near Bristol.

The fund used to receive £12m a year but now receives only £5m. Sir Nicholas said it needed £20m to work.

There was also a need for a one-stop shop, to be based at the museums body Resource, for all information on cultural acquisitions and tax, he said. This would encourage early discussions between owners and galleries, and might prevent tugs-of-war such as that between the National Gallery and the Getty Museum in the US over the Raphael painting The Madonna of the Pinks.

Unveiling his proposals, Sir Nicholas stressed the importance of acquisitions, and noted that there was a "strong political strand" that failed to understand this.

"Museums, galleries and libraries depend for their success on the quality of their collections. Without their collections they are meaningless," he said.

"The Government's priorities have seemed to dwell too much on access and education and not enough on the care of the collections. Well-judged acquisitions ... are not, as some commentators make out, an optional extra."

The recommendations were broadly welcomed by the art world, including the National Art Collections Fund, which helps galleries to purchase works and has lobbied for tax changes.

However, some insiders expressed disappointment that the review had not gone further in proposing radical tax relief to encourage giving on a much bigger scale.