Gifts to
Charities
Gifts to charities are exempt from Inheritance
Tax (IHT) whether they are made in lifetime or by
Will. Likewise a gift to a trust that is established for
charitable purposes is exempt from IHT. The Charities
Act 2011 defines a “charitable purpose” as one that falls
into one of 13 categories defined in the Act and is for the public
benefit. The 13 categories are:
•
•
•
•
•
•
•
•
•
•
•
•
•
The prevention or relief of poverty
The advancement of education
The advancement of religion
The advancement of health or the saving of lives
The advancement of citizenship or community development
The advancement of the arts, culture, heritage, or science
The advancement of amateur sport
The advancement of human rights, conflict resolution or reconciliation or the
promotion of religious or racial harmony or equality and diversity
The advancement of environmental protection or improvement
The relief of those in need, by reason of youth, age, ill-health, disability, financial
hardship or other disadvantage
The advancement of animal welfare
The promotion of the efficiency of the armed forces of the Crown or of the efficiency of the
police, fire and rescue services or ambulance services
Any other charitable purpose
In most cases a straightforward gift will be sufficient to gain the exemption. HMRC define a
“straightforward” gift as a gift to charity that is given absolutely and unconditionally. A gift will
not be straightforward if it is expressed to be for a special purpose, although an expression
of a non-binding wish as to how the legacy should be used is acceptable. A gift will not be
straightforward if it is made to a private or family charity or a subsidiary fund of an organisation.
To qualify for the exemption a charitable gift must be to a UK registered charity and must be
outright (not subject to any conditions) and immediate. Although a gift that is subject to a
condition may qualify for the exemption only if that condition is satisfied within 12 months.
14
The Society of Will Writers