Finance Bill 2012: Charities round-up

Charities and tax experts have broadly welcomed tax changes in the draft 2012 Finance Bill aimed at boosting charities and voluntary organisations.

The new tax rules, which the government plans to include in the 2012 Finance Bill, include reducing the inheritance tax (IHT) rate for estates leaving 10% or more to charity; a new tax incentive for people who leave “pre-eminent”  art or historical objects to the nation; putting “In-year repayments” of income tax to charities on a statutory footing.

Alison Smith, tax adviser at PwC, said the Big Four firm welcomed the introduction of a reduced rate of inheritance tax from 40% to 36% if an individual leaves at least 10% of their estate to charity.  

But she also said that the new rules are “very complicated”, which will make the rule difficult to administer. “A number of individuals who choose to take advantage of these changes are likely to be small unless it is simplified,” Smith said. “We would still like the Government to consider some form of simple credit against your inheritance tax for charitable giving." 

Continued...