Inheritance tax consultation hopes to boost donations
Government plans to boost legacy giving may be furthered with a consultation on the inheritance tax break incentive
A CONSULTATION on the government’s plan to boost charitable legacies has been announced.
Chancellor George Osborne used the Budget to launch a 10% inheritance tax reduction for those who leave at least one-tenth of their estate to charity, with the aim of encouraging higher legacy giving.
The consultation can be found on the HMRC website and runs until 31 August. Justine Greening, economic secretary to the Treasury, said: “This reduced rate of IHT should provide an extra incentive for people to use their estate to support worthy causes and we very much hope that this consultation will mean we can get the details right so it can make a real difference. ”
PKF tax experts warned the incentive may have a limited impact on legacy-leaver behaviour, and its success will depend upon charities going out of their way to educate donors and the wider public.
Tax director Sarah Campbell said people tend to leave a specific sum or asset rather than a percentage of their estate and careful drafting of the will is going to be essential: “While any tax break is undoubtedly good news [the] announcement is unlikely to help charities in financial difficulties right now.”