Will government proposals under the Finance Bill increase gifts to charity, asks Emma Satterly
The government wants to encourage people to donate more to charities, yet has struggled so far to create a compelling proposition. The white paper Giving talks of making giving easier to encourage more support for charities: if giving is easier people will give more. One such scheme concerns giving through wills: a reduction in the rate of inheritance tax on estates where 10% or more of the net estate has been left to charity. So, is this likely to increase charitable giving?
Draft legislation
Following consultation, draft legislation to be included in the Finance Bill has been published, which will apply to deaths after 6 April 2012. Consultation on the draft legislation ended last week.
The proposals identify three components of property comprised in the estate of the deceased which may be subject to inheritance tax on death:
- The survivorship component: property which, immediately before the death, was joint property liable to pass by survivorship on death.
- The settled property component: settled property which is subject, before death, to an
