Donating fine art to public institutions - tax implications?

Dinarius

Registered User
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I have a small collection of paintings, mostly 20th century, which I would consider donating to an Irish museum.

What are the tax implications of such a donation, if any? In all cases, valuations could easily be arrived at.

Many thanks.

D.
 
Could it be seen as a unified collection and could it be worth €150k?

If so, you can claim a tax credit of 80% of the value. So the net cost to you would be €30k.


However, it has to be a national institution. And they tend to turn down a lot of donations of artworks.

It might be better for you to sell the artworks and donate the cash.

You will pay CGT on any net gain.

However, the charity to which you donate the cash will get a tax credit of 45% of the amount donated.


Brendan
 
Many thanks.

Worth more like €30-40k, I’d say.

I’m a sole trader and have had a reasonable year after two very poor years. Reducing my tax liability would be useful.

D.
 
Brendan,

Thanks.

No, doubt there’s a good reason for the €150k level it’s set at, but it reads like; the rich can reduce their tax liability, but the rest of you can’t.

D.
 
The primary purpose is not to reduce tax, it's to encourage people who own culturally important works to donate them to national institutions and to encourage people to buy important works with a view to donate them.

My understanding is that a lot of the national institutions reject more donations than they accept. They have accession policies. And while I might really enjoy some of the art I have, it's not of museum quality.

In many of the donations, the institution contacts a wealthy supporter to say "This important piece is coming up for sale and it will cost €200k - will you buy it and donate it to us?". So it's not a tax dodge. It's costing them €40k.

Brendan