Donating fine art to public institutions - tax implications?

D

Dinarius

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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.

Tax relief on donations of Heritage Items

If you donate an item (or collection of items) worth at least €150,000 to an approved National Heritage Institution You can claim a tax credit for 80% of the value of the item. The Institutions include: The National Gallery IMMA The Crawford Art Gallery in Cork The National Museum The...
www.askaboutmoney.com

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.

Key Post - Tax relief on donations to charity

Revenue Guide If you make a cash donation of €250 or more to an approved charity, they can claim a tax refund of 45% of the amount you donate. Say you donate €1,000 to a charity. At the end of the year, they will claim €450 from Revenue. So your donation of €1,000 is worth €1,450 to the...
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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
 
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