Averting an inheritance tax black hole: the Acceptance in Lieu scheme saves Professor Stephen Hawking's estate £4.2m
min readIt was announced last week that the late Professor Stephen Hawking’s archive and a collection of his personal effects and office contents have passed into public ownership under the Acceptance in Lieu scheme, relieving £4.2m of inheritance tax in his estate. Professor Hawking’s archive includes a first draft of A Brief History of Time, letters from US Presidents, Popes and Nobel prize winners, and the script of the episode of The Simpsons in which Professor Hawking appeared, and it will pass to the Cambridge University Library. Meanwhile, a collection of Professor Hawking’s personal belongings, including his wheelchairs and communication technology, office furniture and personal reference library, medals, and memorabilia will pass into the collection of the Science Museum in London.
This news demonstrates the scope and variety of objects which can qualify for the Acceptance in Lieu scheme as long as they meet the overarching requirement of pre-eminent importance on grounds of national, scientific, historic or artistic interest. In recent years there has been a general trend away from acceptance only of traditionally ‘pre-eminent’ objects such as Old Master oil paintings and fine historic furniture. For example, last year objects including a collection of Scottish fossils, five antique pianos, 7.5 acres of woodland in the Lake District, and various historical archives all qualified for Acceptance in Lieu. It is also important to note that while in some cases the value of objects accepted is very significant – into the tens of millions of pounds – in other cases the objects which qualify are of much more modest value, with perhaps a few thousand pounds of tax relieved.
The Acceptance in Lieu scheme should be borne in mind even where artworks or objects in an estate might initially seem too esoteric or modest in value to qualify. 2020 was a record year for the scheme, with artworks and objects worth £64.8m passing into public ownership, so while competition to qualify is fierce the Acceptance in Lieu panel does seem increasingly open-minded. Our team of art and luxury legal specialists and tax experts often advise estates and individuals on successful applications for Acceptance in Lieu.
In a once-in-a-lifetime acquisition for the nation, a treasure trove of archive papers and personal objects belonging to the late Professor Stephen Hawking have been acquired by two leading UK cultural institutions.
