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Remember A Charity calls on government to tackle two threats to legacy income

Remember A Charity calls on government to tackle two threats to legacy income

Remember A Charity is calling on the government to help charities who are facing two “major threats to legacy income”.

The consortium of charities that encourage more people to leave a gift to charity in their Will is asking the government:

  • to make charitable Wills exempt from VAT, and
  • to re-examine the recent decision to increase probate fees.

The consortium’s request is part of its wider campaign with government to secure fiscal incentives that will encourage legacy giving among the full population, not only those affected by Inheritance Tax (IHT).

VAT exemption for charitable Wills

The consortium estimates that VAT exemption on charitable Wills could double the number of people leaving a gift to charity in their Will. This would generate a further £800 million a year for good causes, and cost government just £375,000.

Legacy giving remains the single largest source of voluntary income, generating £2.5 billion a year. Last year there were 37,262 charitable estates in the UK.

Rob Cope, Director of Remember A Charity, commented: “Charities are facing two major threats to legacy income. We know that IHT exemption is a powerful motivator for financial advisers to raise the issue of legacy giving with clients and to encourage people to give.

“But from April, the IHT threshold is going up and it will be relevant to fewer people, which means that solicitors will have to approach the topic of legacy giving in a different way. Together with the hike in probate fees, this is a double whammy that could have a detrimental impact on legacy giving and their family estates.”

“We need to ensure that legacy giving is not just something reserved for the wealthiest in society”.

He added: “We are calling on government to introduce a VAT exemption on the cost of writing all Wills that include a charitable gift. While this change would come at a relatively low cost to government, this could make a huge difference to charities, giving solicitors and Will-writers cause to highlight the option and benefits of legacy giving with all clients.

“We need to ensure that legacy giving is not just something reserved for the wealthiest in society; that it is something we are all given the opportunity to do.”

The Institute of Fundraising and Charity Finance Group are supporting Remember A Charity’s call for VAT exemption on charitable Wills and the broader principle of developing fiscal incentives that benefit anyone who chooses to leave a legacy to charity.

Probate fees

Probate fees have jumped recently to £215, but from May 2017 a sliding scale of fees will be introduced, starting at £300 for estates worth between £50,000-£300,000 and ending at £20,000 for those above £2 million.

Andrew O’Brien, Head of Policy and Engagement at Charity Finance Group, said: “It is important that the government does not undermine existing incentives through increasing probate fees on estates that leave money to charity which could have significant unintended consequences. The government should also align its tax policy so that unseen taxes such as VAT support the government’s objectives to increase charitable giving.”

Institute of Legacy Management “very disappointed”

The Institute of Legacy Management (ILM), which responded to the Ministry of Justice consultation last year on probate fees, is “very disappointed” that the Courts Service is pushing ahead with these changes “despite overwhelming opposition”.

It is concerned that donors, charities and beneficiaries will all be affected by this change, and estimates that it will reduce income for charities by around £18 million a year.

Petition to government

A petition “to reconsider the proposed significant and unreasonable increase in probate fees” has been launched on the Government’s petitions site. It has attracted over 7,000 signatures already.





Howard Lake is a digital fundraising entrepreneur. Publisher of UK Fundraising, the world's first web resource for professional fundraisers, since 1994. Trainer and consultant in digital fundraising. Founder of Fundraising Camp.

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