A number of voluntary sector groups are calling on the Government to tread carefully in its efforts to simplify Inheritance Tax (IHT), amid concerns that any drastic changes could have “potential negative consequences” for legacy giving.
Remember a Charity, the National Council for Voluntary Organisations (NCVO) and the Institute of Fundraising (IoF) have all banded together to issue a response to the Government’s consultation into ‘simplifying’ the UK’s IHT framework.
In it, the groups point out that legacy-giving currently brings in more than £3 billion a year for charities all across the country – money which is much-needed by these organisations.
As such, the groups claim that the Government must ‘avoid’ making any drastic changes that might reduce legacy-giving in the coming years when investigating ways of simplifying IHT.
Instead, the NCVO, the IoF and Remember a Charity are calling on the Government to use any opportunity to reform IHT to try and increase gifts in Wills.
Under existing rules, gifts left to charities in Wills are IHT-free and individuals who donate 10 per cent or more of their estate to a charity can benefit from paying a reduced rate of IHT.
But charity groups claim that the Government should introduce further tax incentives to encourage more people to leave such gifts.
“Tax relief should not be considered purely as a saving for the consumer or a cost to Government, but as an opportunity to make a real difference to society for generations to come,” one of the campaigners said.
“While IHT might need review, it is essential that any changes will continue to support and encourage gifts in Wills.”