Branson and high-fliers pledge 10 per cent of estate to charity 3

Fundraising | Celina Ribeiro | 31 Oct 2011

Sir Richard Branson and a raft of other high-profile entrepreneurs have pledged to give away 10 per cent of their wealth to charity in their wills.

The Virgin empire founder joined with investment banker Jacob Rothschild and Carphone Warehouse co-founder Charles Dunstone in pledging to make the 10 per cent legacy bequests, which together equate to nearly half a billion pounds.

Their pledges come ahead of the launch of Legacy 10 on Wednesday, an initiative which aims to get 10 per cent of the UK population giving away 10 per cent of their estate to charity in their wills. The campaign, led by Roland Rudd, founder of financial communications firm Finsbury, has already signed up pledges from other wealthy businesspeople including Innocent Drinks founder Richard Reed and the owner of airline BMI, Michael Bishop.

Legators will soon have a self-interest in leaving 10 per cent of their estates to charity; as of April 2012 any estate which bequeathes at least 10 per cent of its value to a charitable or cultural cause will enjoy a reduction in inheritance tax, from 40 per cent to 36 per cent.

Culture Secretary Jeremy Hunt and Chancellor George Osborne will be on hand to endorse the campaign, which will be launched at the Tate Britain.

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Stephen Lulsley
Independent Commentator and Consultant
18 Nov 2011

Whoopee Sir Richard! Who gets the other 90% of your over inflated personal wealth? If you really want to make a mark, why not leave 90% to charity and 10% to your family and other special people? It would surely still leave them more than comfortably provided for.

[Reply]

Vernon Blackburn
3 Nov 2011

The cost to the beneficiaries is not 10% of the estate - much less. As I understand the proposals, it is only 10% of the excess over the Nil Rate Band. And when the 4% reduction in Inheritance Tax on the excess is taken into account the net cost to the remaining beneficiaries is only about 24% of the amount that charities receive. In a simple case of a single person with an estate of £1million and no lifetime gifts to take into account, charities would receive £67,500 but the cost to the non charitable beneficiaries would be only £16,200 - ie 24% of the amount the charities receive and only 1.6% of the gross estate. 2.4% sounds much better than 10% when you are trying to sell it to the public - ie £9.76 in £10 still goes to your loved ones but the charities get 67.5p in £10. The government pays the difference.

Charities must stress the net cost, not gross - I am sure there are very many people who would not worry about their families losing 2.4% (less for a married couple) but might have to think very hard about 10%.

[Reply]

David Burrows
Head of Fundraising
TDA
31 Oct 2011

It's an excellent idea. Wonder how they are going to promote it to ordinary folk?

Expressing the percentage as £1 in £10 might work better for the public - as this (somewhat irrationally) makes it clearer that £9 in £10 still goes to your loved ones.

[Reply]

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