News

Encouraging charitable giving

  • July 19, 2012
  • By Hunters Law

An additional Inheritance Tax (IHT) relief has been introduced which is designed to make it more attractive to individuals to bequeath part of their estate to charity. The change was made in the Finance Act 2012 and relates to deaths occurring on or after 6th April 2012.

The new IHT relief reduces the rate of IHT payable on a person’s taxable estate, from 40% to 36%, if 10% or more of their estate is left to charity.

Gifts to charities are already exempt from IHT, as are gifts to spouses and civil partners.  The new relief means that beneficiaries of a deceased person’s estate could benefit from a lower rate of IHT, so that the “cost” to them of more of the estate passing to charity is reduced.

The mechanics of the relief are not straightforward and will need to be considered carefully in each set of circumstances.  People intending to make a Will may wish to consider including suitable words to take advantage of the relief, but this must be done with care to avoid unintended consequences.  In some cases,  beneficiaries may find that it would be beneficial to enter into a Deed of Variation within two years of a death to increase marginally the amount left to charity.

Although the relief may be helpful, donors should still consider whether it would be more tax efficient or desirable for other reasons to give to charity during their lifetime, which can attract capital gains tax and income tax reliefs.

For further information, please contact a member of the Private Client Department.

Related News

Nov 02, 2018
Hunters featured in CLH News for sponsoring a charity boxing fundraiser
Oct 04, 2018
Dominik Opaliński discusses combatting insider fraud in the Charity Sector in The Times Law Brief
Sep 24, 2018
Dominik Opaliński examines combatting fraud in the charity sector in NatWest ContentLive
Apr 30, 2018
Hunters to participate in London Legal Walk 2018 in support of its Charity of the Year: The Trussell Trust
Apr 16, 2018
The Trussell Trust, Hunters’ Charity of the Year, announces the Tour de Trussell is now live and registration is open
Jan 17, 2018
Charity of the Year 2018 – The Trussell Trust
Jan 01, 2017
Charity of the Year 2017 – Home Start Westminster
Nov 08, 2016
Charities vs children: who decides?
Sep 23, 2016
Dominik Opaliński discusses the charity sector post-Brexit in New Law Journal
Sep 13, 2016
Dominik Opaliński’s article re the impact of Brexit on the charity sector published in Solicitors Journal

© Hunters Law LLP 2019 | Privacy NoticeLegal & Regulatory | Cookies Policy | Complaints Procedure

Hunters Law LLP is authorised and regulated by the Solicitors Regulation Authority (number 657218)