Private treaty sales to specified public bodies also attract tax concessions where the vendor is liable to capital gains tax or inheritance tax. Such tax charges are not incurred if the owner sells material that qualifies for conditional exemption by private treaty to one of the designated (Schedule 3) bodies listed in the Inheritance Tax Act 1984.

Consequently, the manuscripts or archives offered to one of these bodies must be of pre-eminent quality or already have been granted exemption under the rules in operation prior to 1998. The designated public bodies include national archives, museums, and libraries, local authority and university repositories. The benefits from waiving the tax are split between the vendor and the purchasing institution, and are normally shared so that the seller receives 25% of the tax saving (the douceur) and the institution receives 75%. Under the douceur arrangements, the vendor receives more, net of tax, than if the material was sold on the open market and tax paid on the proceeds. Similarly, the body acquiring archives or manuscripts has to pay less than the open market value.

All these schemes allow owners of heritage assets of suitable quality to transfer them to public bodies in a manner which is financially beneficial and prevents the dispersal of collections of such material at auction.

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