Art in lieu of inheritance tax: Lucian Freud ============================================ ![Art in lieu of inheritance tax: Lucian Freud](https://vardags.com/images/pictures/3f34ddceeb3fd1566c49075b5329003d.png)This June, a previously unseen self-portrait by Lucian Freud will be unveiled at the National Portrait Gallery, as part of a small public display of the artist's portraits. The gallery acquired the painting through the 'Acceptance in Lieu' [scheme](https://www.artscouncil.org.uk/tax-incentives/acceptance-lieu), which enables liable taxpayers to offset inheritance tax by donating objects 'of particular historic, artistic, scientific or local significance'to the state. The portrait, a fragment of which can be viewed , was never finished, yet will settle nearly £560,000 of outstanding tax. It will become part of an existing archive at the National Portrait Gallery, which includes the late artist's sketchbooks, drawings and letters, also allocated through the scheme. In addition to this treasure trove, Freud's personal collection of Frank Auerbach artworks will be distributed across a number of UK galleries, in order to settle a staggering £16 million tax liability. Freud: artist, Casanova, secret-keeper -------------------------------------- Freud passed away in 2011 at the age of eighty-eight, and the beneficiaries of his £96 million estate have been shrouded in mystery. Giving credence to the stereotype of artists living passionate, volatile personal lives, Freud fathered at least fourteen children, from his first marriage and a smattering of love affairs. Yet only one daughter, Rose Pearce, was a named beneficiary in his will, with the entire fortune seemingly split equally between Pearce and Freud's friend and solicitor Diana Rawstron. However, as [reported](https://www.telegraph.co.uk/culture/art/11000900/Lucian-Freuds-will-to-remain-secret-after-son-loses-legal-challenge-to-its-validity.html) by *The Telegraph*, the pair 'later revealed the painter had instructed them to hold the money in trust for others, whose identity was to remain a closely guarded secret'. Despite a legal bid by one of Freud's sons to challenge the secrecy of his father's will, its contents remain under wraps. Acceptance in Lieu ------------------ Through the Acceptance in Lieu scheme, a UK taxpayer may offer to transfer culturally significant objects into the public domain as a tax payment. As [outlined](https://www.artscouncil.org.uk/sites/default/files/download-file/ail_guidance_notes_Apr_2016.pdf) by the Arts Council, offers must be made to HMRC and approved by Culture Minister, 'who is advised by Arts Council England's AIL Panel', which consists of various art experts. The Arts Council states that those wishing to make an offer must provide the following information: > - A valuation and justification of the valuation > - An explanation of why the object is considered pre-eminent > - A description of the object > - At least three good quality colour photographs and a high resolution jpeg > - Details of where the object can be inspected and with whom inspection should be arranged > - Evidence that the offeror has good legal title to the object and details of its ownership between 1933-1945 > - Details of the occasion which gives rise to the payment of tax. In the previous financial year, the scheme was permitted to write off up to £40 million of tax. That said, AIL panel Chair Edward Harley [stressed](https://www.artscouncil.org.uk/sites/default/files/download-file/Cultural_Gifts_Scheme_and_Acceptance_in_Lieu_report_201415.pdf) that 'it would be unwise to see this amount as a target which has to be spent', and 'only works of pre-eminent importance'would be accepted under the scheme. Of course, art, by its very definition, is subjective, and commenters on the boards of the first media outlets to report the Freud story bemoaned the fact that, despite being unfinished, the portrait enabled such a significant chunk of tax to be written off. However, consider the fact that *Pregnant Girl*, an earlier painting by Freud [recently sold for £16 million](https://www.dailymail.co.uk/news/article-3442118/Lucian-Freud-s-painting-teenager-lover-pregnant-daughter-Bella-sold-16-million.html), and the amount looks considerably less excessive. Furthermore, the fact that the portrait is unfinished does not necessarily detract from its significance. In fact, it could even be seen as enriching it. [Just ask the artist himself](https://users.wfu.edu/~laugh/painting2/freud.pdf): > "A moment of complete happiness never occurs in the creation of a work of art. The promise of it is felt in the act of creation but disappears towards the completion of the work… Until then he had almost dared to hope the picture might spring to life." "Ayesha Vardag - Britain's top divorce lawyer." ![The Huffington Post](https://vardags.com/images/logo/huffpost.png) "Ayesha Vardag - Woman of the Year"![GG2](https://vardags.com/images/logo/gg2-3.png) "Leading, Magic Circle law firm."Mr Justice Coleridge "A handful of firms dominate the so-called 'glamour' end of the market ... Vardags"The Times "One of the best divorce lawyers in the country"Marie Claire "Ayesha Vardag - 'diva of divorce' for the world's super rich" ![BBC](https://vardags.com/images/logo/bbc.png) "Dr Stephen Bence is a financial genius."Lewis Marks KC "Ayesha Vardag - the Queen of divorce"Daily Mail "Vardags brilliantly argued my case to a resounding victory"Pauline Chai (client) "Britain's top divorce lawyer" ![The Telegraph](https://vardags.com/images/logo/telegraph.png) More Wills & Trusts news ---------------------------- [Sticking to their guns: family determined to destroy $5m inheritance](https://vardags.com/family-law/family-destroy-inheritance "Sticking to their guns: family determined to destroy 5m inheritance") [The fate of Prince's estate: a cautionary tale about dying intestate](https://vardags.com/family-law/princes-estate-dying-intestate "The fate of Princes estate: a cautionary tale about dying intestate") [Art in lieu of inheritance tax: Lucian Freud](https://vardags.com/family-law/art-in-lieu-of-inheritance-tax-lucian-freud "Art in lieu of inheritance tax: Lucian Freud") [Lynda Bellingham's sons to dispute will](https://vardags.com/family-law/lynda-bellingham-sons-dispute-will "Lynda Bellinghams sons to dispute will") [My second best bed: new x-rays of Shakespeare's will offer fresh revelations](https://vardags.com/family-law/my-second-best-bed-x-rays-of-shakespeares-will-offer-fresh-revelations "My second best bed: new x-rays of Shakespeare's will offer fresh revelations") Articles by Maire Connor ------------------------ [The fate of Prince's estate: a cautionary tale about dying intestate](https://vardags.com/family-law/princes-estate-dying-intestate "The fate of Princes estate: a cautionary tale about dying intestate") [Ayesha Vardag for the Daily Telegraph - "Divorce law in Britain is outdated - and designed to make couples suffer"](https://vardags.com/posts/ayesha-vardag-daily-telegraph-divorce-law-britain-outdated-designed-make-couples-suffer "Ayesha Vardag for the Daily Telegraph - 'Divorce law in Britain is outdated - and designed to make couples suffer'") [Art in lieu of inheritance tax: Lucian Freud](https://vardags.com/family-law/art-in-lieu-of-inheritance-tax-lucian-freud "Art in lieu of inheritance tax: Lucian Freud") [Limbo in Lebanon: mother charged with kidnapping own children urged to accept custody deal](https://vardags.com/family-law/mother-kidnapping-children-custody-deal "Limbo in Lebanon: mother charged with kidnapping own children urged to accept custody deal") [Colombia is poised to legalise same-sex marriage](https://vardags.com/family-law/colombia-legalise-sex-marriage "Colombia is poised to legalise same-sex marriage")