The Budget Report named 30 charities which are to benefit from a share of ÂŁ45 million to be raised through banking fines over the next 4 years. A number of charities will receive more than ÂŁ1 million, including the provision of air ambulance facilities, a very popular local charitable cause across much of the UK. Measures to make Gift Aid easier to administer online are also expected in the Finance Bill, which reflects the popularity and ease of digital gifting.
Following on from the initial announcement of £5 million earmarked for women’s charities in the last Autumn Statement, 19 charities were named as recipients of £12 million of funding from the so-called tampon tax fund, though the future of this source of funding must now be in doubt following EU ruling changes for the UK. This could affect two large payments of £1 million each for Girlguiding and Breast Cancer Care. At a more local level, Comic Relief and the Rosa Fund will be involved in further grant-making activity to distribute funding across a wider range of grassroots women’s groups across the UK.
The Government has also announced that it wants to remove unnecessary legislation relating to charity lump sum death benefits from the pensions rulebook. The Standard Life article comments that we await the publication of the Finance Bill to see what this entails and whether it removes the 45% tax charge which can still apply in some cases when pension money is paid to a charity after someone dies.
In a previous Standard Life article, it was noted that projections for inheritance tax receipts were already expected to increase in the years ahead. This latest Budget has seen the increase being accelerated from the current tax year onwards. Inheritance tax is now forecast to raise ÂŁ4.6 billion in 2015/16. The exemption from inheritance tax for money or assets left to a charity is therefore important to keep in mind.
Interestingly, according to Standard Life, figures show an upward trend in the number of estates claiming exemption from inheritance tax using this charity exemption, from 7,488 estates in 2010/11 to 8,372 estates in 2012/13. In 2012/13 over 1,550 estates also made use of the new 36% inheritance rate, which applies where 10% or more of the value of an estate is left to qualifying charities. For charities looking at potential sources of future funding, it’s clear that there are thousands of UK taxpayers willing to benefit charities via this route.
Sources: www.standardlife.co.uk
