Items which have been granted conditional exemption from capital taxation (Inheritance Tax (“IHT”) or Capital Gains Tax (“CGT”)) can be purchased by private treaty by a body listed in Schedule 3 of the Inheritance Tax Act 1984 (which includes most public museums, galleries and archives in the United Kingdom) at a price which is beneficial to both the public purchaser and private vendor. This is known colloquially as a Private Treaty Sale.
Such a sale will not give rise to a charge to IHT or CGT (sections 32 (4)(a) and 32A(5)(a) of the Inheritance Tax Act 1984 and section 258 of the Taxation of Chargeable Gains Act 1992).
For example when an item that has been granted conditional exemption from Inheritance Tax, which would have been payable at 40 per cent but for the exemption, is sold to a Schedule 3 body the purchasing body will usually only pay about 70 per cent of the item’s agreed open market value. So an item valued at £100,000 can be acquired for £70,000.
This is made possible under an administrative arrangement known as the douceur. It entails sharing the benefit of fiscal exemption between the vendor (usually 25%) and the purchaser (usually 75%). Hence the vendor typically obtains a sweetener of 25% and the purchase price is reduced by 75%, of the IHT and CGT otherwise payable.
The arrangement follows the principles enunciated in their report in 1952 by the Waverley Committee on the Export of Works of Art etc.
Since 1982 H M Revenue & Customs has routinely requested owners of works of art, when it granted exemption, to give MLA 3 months’ notice of an intention to sell them. You will find details of any items which we have been notified as coming up for sale below.
Further details of items for which we have received notice of sale and how Private Treaty Sales are conducted can be found in our detailed guidance on Private Treaty Sales and obtained from Gerry McQuillan, Senior Adviser, Acquisitions, Export and Loans Unit at MLA on 020 7273 1456, e-mail: gerry.mcquillan@mla.gov.uk or Anastasia Tennant, Manager of the Acquisitions, Export and Loans Unit at MLA on 020 7273 8271, e-mail: anastasia.tennant@mla.gov.uk.
Notices of Intention of Sale
MLA has received notifications of sale for the following items which have previously been exempted from capital taxation. Please note that the price given is intended as a rough guide only, and does not constitute an offer to sell at this price. The practice of the auction houses is usually to pitch this at their high auction estimate or, sometimes, even higher.
SIR WILLIAM DOBELL
TWO SKETCHES OF SIR ANTHONY QUAYLE AS FALSTAFF AT STRATFORD
Sale date: October 2011
Walter R Sickert (1860-1942)
Au Café Concert, Dieppe
oil on canvas
71.1 by 22.9 cm
Signed, 1920
Guide Estimate: £90,000 - £130,000
EARLY AUSTRALIAN WATERCOLOURS ILLUSTRATING THE ZOOLOGY AND BOTANY OF NEW SOUTH WALES
1. New South Wales Drawings (The Lambert Drawings) 225 watercolours in Three Volumes;
Folio (430 x 280mm) contemporary calf gilt, the calf spine gilt in compartments with red and dark green morocco lettering pieces titled ‘NEW SOUTH WALES DRAWINGS’
2. Zoology of N. Holland etc;
Folio (503 x 392mm) 19th century half tax morocco gilt, with marbled papered boards, the spine in compartments with red morocco lettering pieces titled ‘ZOOLOGY OD N. HOLLAND ETC:’
An album containing 31 watercolours of fish and 113 watercolours of birds, the fish all inscribed in an 18th century hand, mostly tin regard to the scale of the drawings, the sheets mounted on laid blue paper album leaves, 50 by 37 cm and smaller
3. Drawings of Plants of New South Wales;
Small folio (330 x 214mm) contemporary calf gilt, rebacked with 19th century speckled calf gilt in compartments with green morocco lettering piece titled ‘DRAWINGS OF PLANTS OF NEW SOUTH WALES:’
An album containing approximately 259 botanical watercolours the majority inscribed in one or two contemporary hands, with notes regarding the species, scale, flowering period, habitat and notes on the shipboard storage locations of accompanying specimens in the reverse, watercolour, several heightened with gum Arabic, on paper with watermarks, the majority 31.1 x 19.m cm.
4. Drawings of Plants from New South Wales;
Small folio (330 x 214mm) contemporary calf gilt, rebacked with 19th century calf gilt in compartments with red morocco lettering piece titled ‘DRAWINGS OF PLANTS FROM NEW SOUTH WALES:’
An album containing 113 botanical watercolours the majority inscribed in one or two late 18th century hands, with notes regarding the species, scale, flowering period and habitat the majority mounted on laid papers, several of the mounts with watermarks M.J.L / 1802 and ‘Fleur de Lis’, 37.6 by 24 cm and smaller.
GUIDE PRICE £5,000,000
SALE DATE: OCTOBER 2011
JOHANN ZOFFANY R.A.
Frankfurt 1733 - 1810 London
THE GARDEN AT HAMPTON HOUSE, WITH MR AND MRS DAVID GARRICK TAKING TEA; THE SHAKESPEARE TEMPLE AT HAMPTON COURT, WITH MR AND MRS DAVID GARRICK
both oil on canvas, held in Maratta frames
both 99.7 by 125cm.; 39 ¼ by 49 ¼ in.
PROVENANCE:
Painted for David Garrick c. 1762;
His sale, London, Christie's, 23 June 1823, lots 53 & 54 (bt. by Seguier for the Earl of Durham); Thence by descent
EXHIBITED:
Newcastle-upon-Tyne, Royal Mining Engineering and Industrial Exhibition; Fine Arts Section, 1887, no. 1 (both); Newcastle-upon-Tyne, Palace of Art, North East Coast Exhibition, 1929 (The Garden at Hampton House); London, 25 Park Lane, English Conversation Pieces, 1930, nos. 107 & 151; 
London, Royal Academy, British Art, 1934, no. 248 (The Garden at Hampton House); Paris, Musee des Arts Décoratifs, Pavillon de Marsan, Exhibition of English Manners and Humour, 1938, no. 163 (The Garden at Hampton House); London, Arts Council, British Sporting Painting, 1974, no. 65 (The Garden at Hampton House); London, Arts Council, The Georgian Playhouse, 1975, nos. 82 & 83; London, National Portrait Gallery, Johann Zoffany, 1733-1810, 14th January – 27th March 1977, nos. 11 & 12; London, Tate Gallery, on loan 2007-2010 (both).
LITERATURE:
Lady V. Manners and Dr. G. C. Williamson, John Zoffany RA, 1920, pp. 194 & 195; P. Treadwell, Johan Zoffany, London 2009, pp. 66-67, 68-70, 79 & 154-155.
Guide price (for the pair) £8,000,000.
Sale Date: 7th December 2011
For further details please contact:
Anastasia Tennant
Acquisitions, Export and Loans Unit
The Museums, Libraries and Archives Council
Wellcome Wolfson Building, 165 Queen's Gate
London SW7 5HD
Direct Line: 020 7273 1456
Direct Fax: 020 7273 8271
Email: anastasia.tennant@mla.gov.uk