Clive Aslet reports in The Times (limited access) about the impact of treasury taxation on Heritage Maintenance Funds (HMFs) – set up in the 1970’s – in deflecting funds intended for protection of heritage to the taxman.
In a report for the Times Clive Aslet writes:
…HMFs allowed owners to put aside money for the upkeep of their listed homes. They were ring-fenced for that purpose, the quid pro quo being that the fund was exempt from inheritance tax. This wasn’t a tax break for toffs but an attempt to secure the future of some important buildings, whose care might otherwise become the responsibility of the state. The idea was a good one and worked for a time; only now, the Treasury insists on taxing income from the trusts at the top rate of 45 per cent and sometimes even as much as 75 per cent. Capital gains tax is applied to the sale of assets, so that a massive chunk of money intended for the benefit of a heritage property goes to the taxman.
As a result, a backlog of repairs has built up. The prospective bill is now in the hundreds of millions…