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A consultation document has been published on the policy detail and implementation of a lower (36%) rate of inheritance tax when people leave a charitable legacy of 10% or more of their estate – as promised in March's Budget.
Ernst & Young’s Patrick Stevens said the relief ‘may also cause people to think more fully about their estate planning generally’ and remind them that ‘they can make gifts to their family and others during lifetime and, provided they survive for seven years, there will be no inheritance tax liability’.
Responses to the condoc should be sent no later than 31 August 2011.
Economic secretary to the Treasury Justine Greening said, 'The British public are some of the most generous donors to charitable causes in the world... 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.'
Baker Tilly tax partner George Bull warned that a proposed relief cannot be introduced 'without adding complex legislation, simply because the underlying IHT law is already complex.'
He added, 'The Office of Tax Simplification has already drawn attention to the complexity of the current IHT rules but has also said that reform of the system can only be contemplated as a long-term project.'
