The Acceptance in Lieu of Tax (AIL) scheme allows taxpayers to satisfy their liabilities to inheritance tax (or any of its earlier forms) by transferring archives and manuscripts into public ownership. Tax is satisfied by the surrender of material judged by expert advisers to be pre-eminent.

In order to be judged pre-eminent, manuscripts and archives must normally pass one of the following tests, demonstrating that they:

• have an especially close association with our history and national life
• are of especial artistic or art-historical importance
• are of especial importance for the study of some particular branch of art, learning or history
• have an especially close association with a particular historic setting

Although the AIL Panel, in consultation with expert advisers, has formal responsibility for determining the pre-eminence of material offered in lieu of tax, the staff of Archives Sector Development at The National Archives can sometimes give a preliminary steer as to whether archives and manuscripts are likely, in principle, to be eligible.

In satisfying a tax liability, an owner is able to benefit from a douceur - see Private treaty sales - which means that a higher proportion of the value of the material can be set against tax under acceptance in lieu arrangements than if it were sold at auction. Manuscripts and archives are worth roughly 17% more if offered in lieu rather than sold on the open market at the same price. Other benefits include a say in the eventual home to which the material is permanently allocated.

More detailed information on all this scheme can be obtained from the Capital Taxes Officer at MLA, Victoria House, Southampton Row, London WC1B 4EA.

The National Archives, Kew, Richmond, Surrey, TW9 4DU. Tel: +44 (0) 20 8876 3444. Contact us