LETTER: Putting tax on paintings into perspective

DESPITE what Chris Blackhurst and Liz Searl wrote in "Private view: why you can't see the pictures you pay for" (23 July), conditional exemption from inheritance tax on works of art is not a tax loophole. Tax is not waived but postponed until a future sale, or until the wish of the owner not to abide by the conditions. When tax is charged, it is often on a much higher valuation, and from the Revenue's point of view the system could be considered an investment. Having a Canaletto hidden away is a pleasure, but does not provide an income, and there is no way to use the system for gain.

The point of this rule is to avoid forcing a sale of works of art after a death, when often the estate does not have the cash to pay tax on a valuable painting. In return, the new owner agrees to look after the work, and to allow public access. There are advantages also to museums and galleries in Britain, and they will hope that the system continues.

If an exempted painting is sold there is a financial gain to the owner to sell it directly to a public art gallery in Britain. The Revenue allows the vendor to receive slightly more than the open market value after tax, and this price is a considerable saving to the gallery. There is often a similar advantage against capital gains tax. It is through this means that the Tate has been able to afford many of the 17th- and 18th-century British paintings that still hang on our walls.

If it were not for this conditional exemption, more paintings, furniture and porcelain would be sold suddenly, at full value, and probably go abroad. As it is, although the things are difficult to get at, there is a good chance that they will finally belong to a public museum in Britain.

David Fraser Jenkins

Tate Gallery, London SW1