# Legacies at risk from inheritance tax changes, warns Remember A Charity

- Link: https://fundraising.co.uk/2017/04/05/legacies-risk-inheritance-tax-changes-warns-remember-charity/
- Published: 2017-04-05T08:30:01+01:00
- Author: Melanie May

**Changes to inheritance tax could reduce the number of legacies left to charities
by 1,200 a year, according to Remember A Charity.**

 

The changes come into effect from 6^(th) April, and see the introduction of a new
inheritance tax allowance that [Remember A Charity](http://www.rememberacharity.org.uk/)
is warning could leave less incentive for people to include a legacy in their Will.

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The new main residence nil-rate band of £100,000 is being introduced for domestic
residences passed to direct dependents. This allowance is in addition to the current
£325,000 inheritance tax threshold. For a couple, it increases the tax-free amount
from £650,000 to £850,000: an amount that will rise to £1 million by 1st April 2020
through annual increases.

 

Inheritance tax is currently charged at 40% on assets above the £325,000 threshold
of an estate, with a tax break reducing this rate to 36% for those who leave at 
least 10% to a charity. However, with the changes, Remember A Charity believes fewer
solicitors and Will-writers will raise the option of leaving a legacy, leaving less
people aware of this opportunity.

 

A worst-case scenario estimate by Remember A Charity, which it has based on the 
latest [HMRC statistics](https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/541409/Table_12-4.pdf)
on the value of estates suggests that there could be 1,200 fewer people annually
leaving charitable gifts as a result of the tax changes.

 

Rob Cope, director of Remember A Charity, said:

 

> “Tax breaks are a natural entry point for solicitors and Will-writers to raise
> the option of charitable giving during the Will-writing process. But with the 
> tax changes, our concern is that fewer people will be aware of their charitable
> options, which will be a real threat to legacy giving.”

 

Remember A Charity’s latest tracking study of solicitor behaviour released this 
week and carried out by [Future Thinking](https://futurethinking.com/), shows that
the proportion of professional advisers always or sometimes advising clients of 
the tax benefits of legacy giving during Will-writing has risen to an all-time high
of 72%, up from 66% in 2015 and 61% in 2009**_._**

 

Cope added:

 

> “It makes it all the more important that we find other ways to put charity front
> of mind when people are writing a Will. This means engaging more closely with 
> financial advisers and Government, emphasising the importance of legacy giving
> and the need for greater fiscal incentives like VAT-free charitable Wills.”

 

Last year, [data released by Smee & Ford](https://fundraising.co.uk/2016/09/08/2015-record-year-legacies/)
showed that 2015 was a record year for legacy giving, with 37,261 of the Wills that
went to probate in England, Scotland and Wales including a legacy donation, up from
34,908 in 2014.

 

The full changes, as set out by the Government, [can be read on the .Gov site](https://www.gov.uk/government/publications/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band).

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