Conditional Exemption: HMRC Tax Relief for Historical Buildings of National Interest

Historical buildings, lands, works of art, special interest historical artefacts and other objects are liable to conditional exemption tax relief by HMRC. Exempt from Inheritance Tax and Capital Gains Tax, when passing to a new owner, the assets must meet certain criteria. Thus, the assets eligible for tax relief must comprise historical buildings, historical estates or parklands of special historical or architectural interest. In the case of land, it must be of outstanding natural beauty or offer spectacular views. Alternatively, the land must be of particular scientific interest and/or include areas for the conservation of wildlife, plants or trees. Finally, other assets qualifying for tax relief include any other object with scientific, historic or artistic interest relevant to national history or national interest. Furthermore, this final category may include objects that are subject to interest in their own right, or by way of connection to historical building.

In what is termed “the undertakings” by HMRC, new owners who seek to benefit from tax relief are obliged to undertake an agreement to look after the assets. Also, under the tax relief scheme, the asset must be made available for the general public to view. Finally, the asset must remain in the UK. For example, an historical building upon which tax relief is sought must be well maintained and accessible to the public. In the eventuality that the owner fails to uphold the agreement or sells the asset, HMRC will withdraw the tax relief exemption and the tax must be paid. HMRC will make the final determination of which assets are eligible for tax relief. For example, in the case of historical buildings, HMRC will assess claims of national historical interest in coordination with Historic England. Depending on the asset, similar consultations will be made with other bodies.

Click here to visit the official HMRC website for further information.