Acceptance in Lieu

Acceptance in lieu (AiL) is a provision in British tax law under which inheritance tax debts can be written off in exchange for the acquisition of objects of national importance. It was originally established by Chancellor of the Exchequer David Lloyd George as a means for the wealthy to pay the increased estate taxes imposed by his People's Budget of 1909 but had its roots in similar schemes dating to the late 19th century. It has developed from the early years when it was used mainly as a means for the aristocracy to dispose of country estates to the National Trust to the modern day when it is more associated with the transfer of works of art, antiquities and archive material to museums. The scheme is administered by Arts Council England, a non-departmental public body of the Department for Culture, Media and Sport. The scheme has brought many houses, works of art and other collections into publicly accessible institutions when they would otherwise have gone to auction.

With increasing Death Duty (later known as estate duty, capital transfer tax and inheritance tax) being levied on the wealthy in the late 19th century many were forced to sell off their large country houses and estates to pay for their tax liabilities. This often resulted in unique family collections of antiques and works of art being lost and dispersed. The 1896 Finance Act sought to limit the damage by exempting nationally important works of art from taxation and was strengthened by the 1903 establishment of the National Art Collections Fund which sought to acquire important paintings for the nation. Houses and collections continued to be sold however and David Lloyd George's People's Budget of 1909, with its increased land and estate taxes, would have worsened matters. However Lloyd George made a provision in the Finance Act 1910 for the creation of the Acceptance in Lieu scheme to allow land to be given to the nation in lieu of Estate Duty.

...
Wikipedia