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I recognise the concerns around that historical example. To reassure hon. Members, the title of ownership of the object will be initially transferred to the relevant Minister, who will make arrangements for it to be transferred to the receiving institution. I hope that makes it clear that the buck stops with the institution. It is fully expected that the objects will be available to the nation—as it says on the tin, as it were.
Let me continue to cover a few matters raised in the consultation. Points were raised about the introduction of a shared annual funding limit with the inheritance tax acceptance in lieu scheme, which I am sure hon. Members know inside out. Concerns were raised that funding would be stretched and, as a result, important items could be lost to the nation. The consultation had for illustrative purposes set proposed tax reduction at 25%. Most thought that rate too low. However, it was also pointed out that not all owners of pre-eminent objects may have had a high enough income to use the tax reduction in one year. Hon. Members will appreciate the difference between income and assets. Many suggested there should be an option of rolling unused amounts of tax reduction forwards or backwards. Finally, as has been raised in questions, most respondents felt that the donors should be able to place a binding condition on where the item should be held and displayed.
As a result of that consultation, a number of changes were announced in last year’s autumn statement. We have increased the combined annual funding for the new scheme and the acceptance in lieu scheme from £20 million to £30 million. We have decided that, although the objects will still be gifted to the nation, in most cases ownership will be transferred permanently to the receiving institution, subject to a number of conditions. Donors may state a preference as to where the item should be allocated, although that will not be binding.
We have decided that both individual and corporate donors will be able to participate in the scheme, and that the tax reduction will be set at 30% of the value of the objects for individuals and at 20% for companies. Those rates ensure that the donor’s gift is a real one, and not simply a payment of tax in kind. However, we have decided for the time being against allowing other types of donor—for example, personal representatives and trustees—to participate in the scheme.
Respondents to the consultation were also keen that the scheme should be open to as many types of donor as possible. However, many recognised that that would mean the legislation would be longer, more complicated and potentially very little used. Imagine, Mr Amess, although it is a pleasure to serve under your chairmanship, if I had to take even longer to make an opening statement. As funding is limited and we are uncertain of the demand on the scheme, particularly from those groups, this is an area we can look at again after the scheme has been up and running for a while.
We have also decided that individuals donating under the scheme will be able to spread the tax reduction across up to five years from the year when the offer is registered. In addition, we have made a number of other smaller changes to the scheme to ensure that potential donors are not caught out by unexpected tax charges—for example, an inheritance tax charge on a conditionally exempt object.
In conclusion, we want to stimulate lifetime giving by encouraging taxpayers to donate to the nation. The scheme does just that; it benefits the nation as a whole, because it ensures that pre-eminent objects are saved and made available and, crucially, preserves the UK’s heritage for everyone to enjoy. I will be happy to respond to questions shortly.