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Cameron, Clegg and Miliband pledge legacies 1

Fundraising | Celina Ribeiro | 16 Jan 2012

While their views on inheritance tax are far from harmonious, the three major party leaders have today each pledged to leave 10 per cent of their estates to charity in their wills.

David Cameron, Nick Clegg and Ed Miliband have come out in support of the Legacy10 campaign, which is encouraging individuals to pledge a tenth of their estate to charity. The campaign, which launched last November, is using impending Coalition changes to the law on inheritance tax (IHT) to lobby more of UK’s high net worth individuals to make gifts in their wills.

As of April any estate which leaves a legacy worth 10 per cent of its taxable value to charity is eligible for a reduction in the rate of IHT paid on that estate from 40 per cent to 36 per cent. The changes were announced by Chancellor George Osborne at the last budget as part of an attempt to boost legacy giving to good causes. Presently around 7 per cent of Brits make donations to charities in their wills.

However, given that it only applies to estates worth more than £325,000, IHT is only applicable on a relatively small proportion of UK estates. In 2010, for example, IHT was paid only on 3 per cent of estates. As such, it is not surprising that a poll of more than 2,000 people commissioned by Legacy10 found that four out of five people did not know changes are due to IHT, but even though it although even though it applies to a relatively limited number of people, a third of those polled by Populus said they would change their will as a result.

Roland Rudd, founder of the Legacy10 campaign, welcomed the pledges of support from the three party leaders. “The appeal of Legacy10 is its simplicity. We are asking people to make a contribution to their favourite cultural or charitable cause in their will, the benefit to that cause will be four times bigger than the small loss to the donor.

“I am so pleased that all of our main political leaders have not only chosen to support Legacy10 but have also made a personal commitment to change their wills to make the pledge.”

The political support for legacies is in stark contrast to that for another tax-efficient giving mechanism, payroll giving. Civilsociety.co.uk revealed in September only four – or 0.6 per cent -  of MPs give to charity via their payroll. 

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