Government Incentives for Charitable Legacies in Wills

As part of the budget in March this year it was announced that the Government would introduce a lower rate of inheritance tax for people leaving charitable legacies of 10% or more of their estate when they die.

In order for that gift to be exempt from inheritance tax, the charity must be a qualifying charity established in the European Union or some other countries, and recognised by HM Revenue & Customs.

This proposed tax break would affect people considering leaving a charitable legacy when they die, or those amending a Will that provides for a charitable legacy.

HM Revenue & Customs has advised that a new standard clause should be drafted in the Wills of those intending to leave charitable legacies to ensure that their intended charitable gifts do benefit from the planned inheritance tax relief.

This change is expected to apply for deaths on or after 6 April 2012 subject to responses during the consultation period which ends on 31 August 2011.