Government Announces Charitable Legacies Review
A consultation on the government's plan to boost charitable legacies was announced today.
Chancellor George Osborne used the Budget to launch a 10% inheritance tax reduction for those who leave at least one-tenth of their estate to charity, with the aim of encouraging higher legacy giving.
The consultation can be found on the HMRC website here and runs until 31 August. Justine Greening, economic secretary to the Treasury, said: "This reduced rate of IHT should provide an extra incentive for people to use their estate to support worthy causes and we very much hope that this consultation will mean we can get the details right so it can make a real difference."
Chiene + Tait’s Charity & Education team has warned that the plan may not have the desired effect unless not for profit organisations educate potential donors and the general public of the benefits of leaving a legacy to a charity of choice.
Kenneth McDowell, Chiene + Tait Partner, adds, “When a legacy is left to charity, it’s usually a specific sum or an asset, rather than a percentage of an estate. If this change will have an impact, careful drafting of a will is of the utmost importance. We welcome the good news about a tax break, but unfortunately with many charities finding the current climate challenging, it may be a case of too little, too late for some.”
If you have any questions about leaving a legacy to a charity, please contact the Chiene + Tait team at charities@chiene.co.uk or call 0131 558 5800.