Government urged to remove VAT on charitable wills

Remember A Charity says the move could generate a further £800m for charities each year

The legacy consortium Remember A Charity has called on the government to remove VAT on the cost of writing wills that include charitable donations, which it says could generate an additional £800m for charities each year.

The group says that a VAT exemption on the cost of writing wills would cost the government £375,000 a year and would encourage more people to give.

Remember A Charity also called for the government to re-examine its plans to introduce a charge for probate based on the value of an estate, rather than the current flat fee of £215.

The call for VAT exemption is part of the group’s wider campaign to persuade the government to offer more financial incentives in order to persuade more people to consider legacy gifts, not just those affected by inheritance tax.

Rob Cope, director of Remember A Charity, said inheritance tax exemption was a powerful motivator for financial advisers to suggest legacy giving to their clients, but as the threshold for inheritance tax was due to go up from April, it would be relevant to fewer people. This, combined with the rise in probate fees could lead to a fall in giving, he said.

He said he was therefore calling on the government to introduce a VAT exemption on the cost of writing wills that include charitable gifts.

"While this change would come at a relatively low cost to government, this could make a huge difference to charities, giving solicitors and will-writers cause to highlight the option and the benefits of legacy giving with all clients," he said.

"We need to ensure that legacy giving is not just something reserved for the wealthiest in society; that it is something we are all given the opportunity to do."

Mike Smith, head of public affairs at the Institute of Fundraising, said the exemption was a small change that could make a "massive difference" to the number of people who decided to leave money to charity.

"The government has been really supportive of efforts to increase legacy giving, and we are encouraging them to back this small reduction in tax to help raise millions more for good causes," he said.

Legacy giving generates £2.5bn a year for good causes, according to another charity legacy consortium, Legacy Foresight, but Remember A Charity believes more people could be persuaded to give. Research it commissioned in 2008 showed that 35 per cent of people in the UK aged over 40 were happy to give a small amount to charity in their wills, but only 6.3 per cent actually did.

If you’re interested in fundraising, you can’t miss Third Sector’s Annual Fundraising Conference, 23 and 24 MayClick here for more information and to book at the Early Bird rate.

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