Today sees the launch of Legacy 10, an initiative designed to encourage more of us to leave legacies to charities under our Wills
Today sees the launch of Legacy 10, an initiative designed to encourage more of us to leave legacies to charities under our Wills. This comes off the back of the Government’s proposed changes to the inheritance tax regime for those individuals leaving at least 10% of their net estates to charities by Will.
Robert Blower, Partner in the Private Client team at law firm, Charles Russell, comments on today’s launch:
“Currently, any gifts to charity are free of inheritance tax, whether they are made during someone’s lifetime or under their Will. This will remain the case if the new rules are enacted which are intended to be effective for deaths after 5 April 2012. The difference will be however, where an individual leaves at least 10% of their net estate to charity under their Will, the remainder of their net estate will be taxable at the rate of 36% instead of the usual 40%.
“Whilst the tax incentives to encourage charitable giving by Will are to be welcomed, and a raft of wealthy entrepreneurs have already pledged to leave 10% of their estates to charity, it remains to be seen whether the proposals will discourage lifetime giving for those who are likely to have taxable estates. This is because any lifetime gifts to charity will not be taken into account for the purpose of satisfying the 10% test.
“Further, the legislation will have to be very carefully drafted to ensure that a 4% reduction in inheritance tax offers sufficient incentive for individuals to structure their Will in such a way so their estate can benefit from the proposed new regime”.