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Consultation launched to drive charitable giving through lower inheritance tax rate
Views are being invited on the Government’s proposal to incentivise charitable legacy by estates paying a lower rate of inheritance tax (IHT), HM Revenue & Customs (HMRC) announced today. The proposal is part of a wide-ranging philanthropy package announced by the Chancellor at the Budget.
Views are being invited on the Government’s proposal to incentivise charitable legacy by estates paying a lower rate of inheritance tax (IHT), HM Revenue & Customs (HMRC) announced today. The proposal is part of a wide-ranging philanthropy package announced by the Chancellor at the Budget.
The IHT consultation – “A new incentive for charitable legacies” – launched today, follows the Budget announcement, that estates can reduce their inheritance tax rate by 10% (to 36%) when they leave a charitable legacy of 10% or more of their net estate.
This incentive aims to encourage people to leave a charitable legacy, or to increase the amount of an existing legacy, when they die. The consultation focuses on the policy details and how best to implement this policy, which is expected to apply for deaths on or after 6 April 2012. HMRC welcomes views from anyone who has an interest in this area, and particularly from charities and advisers on wills and IHT.
Justine Greening, Economic Secretary to the Treasury said:
“The British public are some of the most generous donors to charitable causes in the world. The Government’s philanthropy package announced at this year’s Budget represented the most radical reforms to charitable giving for more than twenty years and is designed to encourage further financial support for charities. 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.”
The consultation which can be found on the HMRC website at: http://www.hmrc.gov.uk/consultations/index.htm runs from today until 31 August 2011.
Notes for editors 1. Inheritance tax is normally due at 40 per cent above the nil-rate band.
2. The 36% IHT rate will apply to estates that include charitable legacies of at least 10% of the value of the net estate.
3. After applying the IHT threshold and exemptions vast majority of estates are not liable to IHT. In 2010-11 it is projected that of 552,000 deaths only 3% of estates will actually pay any inheritance tax.
4. Consultation closes on 31 August.
5. The nil-rate band is set at £325,000.
NAT 52/11
Issued by HM Revenue & Customs Press Office
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