Friday, 2 September 2011

Illiogical tax break will discourage giving

The country's leading tax body has branded government plans to encourage charitable giving in legacies as "arbitrary, complex and illogical".

The plans, announced in this year's budget, would give a tax discount to people who give 10% or more of their estates to charity.

Currently, any money and other assets above a threshold of £325,000 are taxed at 40%. Qualifying charitable givers would be charged a lower rate of 36% from April next year.

But the Chartered Institute of Taxation has protested that the proposals are complicated, capricious and counterproductive.

Its tax experts are worried that the new system would discourage would-be givers from handing money to charity via regular giving or in their wills.

Instead they recommend that any charitable gift in a legacy receives an automatic 11% tax perk for the charity.

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