Inheritance Tax rise could cost charities dear
Howard Lake | 3 December 2014 | News
Wills and tax law specialists Moore Blatch have warned that if the Government raises the Inheritance Tax nil-rate band from £325,000 to £1 million in today’s Autumn Statement, many people will be put off from leaving money to charity in their Will.
At present, if an estate is worth over £325,000 when you die, Inheritance Tax may be due. However, any gifts made to a qualifying charity either during an individual’s lifetime or in their Will, are exempt from Inheritance Tax.
In addition, if you leave 10% or more of your estate to a qualifying charity, any Inheritance Tax due from the estate may be paid at a reduced rate of 36% instead of 40%. This can mean that a gift to a charity can cost nothing to the beneficiaries.
Moore Blatch has warned that the charities most likely to be affected are those that receive significant annual legacies. According to Charities Aid Foundation, the five charities in England and Wales that received the largest amounts of legacy income in the year to October 2014 were:
1. Cancer Research UK: £142,456,707
2. RNLI: £101,457,157
3. RSPCA: £67,671,000
4. Macmillan Cancer Support: £51,219,000
5. The National Trust: £44,688,000
Smaller charities are of course not immune.
Carla Brown, Partner and Head of Wills, Tax and Trusts, Moore Blatch commented:
“Smaller, local charities also benefit greatly from money left to them in the Will of kind benefactors. Although an IHT nil-rate band increase to £1 million seems unlikely in view of the continued deficit in the country’s finances, any increase would almost certainly have an impact on people’s propensity to leave money to charity. We would urge anyone who wants to give money to a charity to make the appropriate provision in their Will.”
Photo: legacy by Marekuliasz on Shutterstock.com
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About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.