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Inheritance Tax Relief on Charitable Donations Leading to more Contested Wills

Posted by Kings Court Trust | Aug 27, 2015 9:00:00 AM

The Solicitors Journal recently published an article which claimed that an increase in the number of people leaving charitable donations in their Wills is leading to a rise in the number of contested cases.

As charitable donations reach a record high, Inheritance Tax (IHT) relief on them totalled around £630 million last year.  While charities are increasingly benefitting from legacies left to them, it is reported that they are also finding themselves in the middle of conflict with other beneficiaries who decide to contest the decisions.

The Blue Cross, the Royal Society for the Protection of Birds (RSPB) and the Royal Society for the Prevention of Cruelty to Animals (RSPCA) have all been at the centre of the widely publicised Ilott case recently, whereby the Will of Melita Jackson, which left the charities her full £500,000 estate, was overturned in Court with her daughter receiving a third of the value after years of legal wrangling.

The law firm representing the charities in the Ilot case, Wilsons Solicitors, have estimated that the value of bequests from estates over the IHT threshold reached a total of around £1.6 billion by the end of the 2014/15 tax year. With this figure increasing, it is suggested that charities may be subject to more legal conflicts and complications in the future.

Tim Fullerlove from Wilsons Solicitors said: "The main heirs in Wills are now often of an age where they have already achieved a reasonable level of financial security. That means that their elderly parents no longer feel an obligation to leave them everything, and are more likely to set something aside for charitable causes."

In order to encourage more people to leave inheritance to a charity in their Will, Fullerlove claims that people should be made aware of the fact that increasing charitable donations could reduce the overall tax burden on their estate.

What do you make of this unexpected challenge now facing charities?

Topics: IHT, Industry News, Inheritance Tax, Solicitors Journal