# OTS report recommends keeping legacy tax breaks

- Link: https://fundraising.co.uk/2019/07/08/ots-report-recommends-keeping-legacy-tax-breaks/
- Published: 2019-07-08T08:00:16+01:00
- Author: Melanie May

**The Office of Tax Simplification has recommended retaining the current tax breaks
for legacy giving in a new report.**

Currently charitable gifts in Wills are exempt from Inheritance Tax, which is charged
at 40%, with those donating over 10% of their estate to charity also receiving a
discounted rate of 36% across the remaining value of their estate. The OTS review
had questioned whether this incentive to give over 10% should be continued, and 
it has now found in favour of keeping it.

Tax relief on charitable estates increased by 79% to £840 million in the five years
since the 10% IHT incentive was first introduced.

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In a joint submission to the OTS, [Remember A Charity](https://www.rememberacharity.org.uk/),
the Institute of Fundraising and the NVCO had highlighted the importance of the 
tax breaks in inspiring legacy giving, and Remember A Charity has welcomed news 
of [OTS’s recommendation](https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/814181/Final_Inheritance_Tax_2_report_-_web_copy.pdf).

Rob Cope, Director of Remember A Charity, commented:

> “People leave a legacy because they care about the cause and want to leave the
> world a better place. But tax relief is critical. It can be a powerful incentive
> for supporters and, most importantly, gives solicitors a reason to open up conversations
> about legacies, massively increasing the chances of a charitable donation being
> made.
> “Although gifting 10% or more of the value of an estate to charity is something
> that applies to a minority of Wills, the fact is that those estates yield the 
> highest proportion of legacy income. If current giving levels continue, over the
> next five years over 10,000 estates will likely benefit from this reduced rate
> of tax, generating millions in legacy income.”
> “We are delighted that the OTS has recognised the importance of this tax break
> in reaching wealthier donors, but particularly pleased that they have recognised
> its role in creating conversation about legacy giving between advisers and clients.”

 * **[Charity tax reliefs need urgent overhaul, finds NCVO commission](https://fundraising.co.uk/2019/07/17/charity-tax-reliefs-urgent-overhaul-ncvo-commission/)**(
   17 July 2019)
 * **[Charities Institute of Ireland calls for change in charity tax regulations](https://fundraising.co.uk/2019/09/03/charities-institute-of-ireland-calls-for-change-in-charity-tax-regulations/)**(
   3 September 2019)
 * **[Low take up of tax relief on donations means charities could be missing out on millions](https://fundraising.co.uk/2022/04/06/low-take-up-of-tax-relief-on-donations-means-charities-could-be-missing-out-on-millions/)**(
   6 April 2022)

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