Family heirlooms could reduce your inheritance tax liability

Newsletter issue – October 2026

Certain family heirlooms, artworks, manuscripts, collections, land, or historic estates can significantly reduce - or even eliminate - inheritance tax (IHT) if they qualify as items of national importance and are kept under specific HMRC schemes.

These objects of outstanding national, scientific, historical, or artistic importance are known as 'pre-eminent items'. These items can reduce inheritance tax because the UK has long-standing exemptions for works of art, originally introduced to prevent important pieces being sold abroad.

Two key schemes now exist: Conditional Exemption and Acceptance in Lieu. For the former, if an item is accepted as being of national importance, its value can be deducted from the estate, meaning no IHT is due on it. However, the owner must meet strict conditions: keep the item safe, keep it in the UK, publicise it, and make it accessible to the public (e.g., through viewings or loans to museums).

The scheme is designed to encourage families to retain heirlooms while ensuring public benefit. Many people assume they must sell valuable items to reduce their estate size but keeping culturally significant objects can be financially advantageous under these schemes.

Acceptance in Lieu is different in that you relinquish ownership of pre-eminent items to settle all or part of your IHT bill (you receive a tax credit).