CAF and Treasury to pursue lifetime legacies

Fundraising | Vibeka Mair | 15 Oct 2008

The Charities Aid Foundation and HM Treasury have set up an informal working group to explore the possibility of introducing lifetime legacies in the UK.

The current concept for a lifetime legacy is to allow people to give assets or shares to charity, but potentially to keep any income derived from them while they are still alive, depending on the conditions of the legacy. Ownership of the asset passes to the charity after the donor’s death, and the assets qualify immediately for exemption from inheritance tax.

The group met for the first time last week. It is chaired by Jeremy Sherwood, head of the Treasury’s charity tax branch and John Low, chief executive of CAF (pictured).

Robust evidence base

Low said: “It is encouraging that the Treasury is willing to examine this important issue. Lifetime legacies have been proposed several times in the past and it is important now to develop a robust evidence base – to determine whether this policy initiative would be feasible and would have a positive impact for the sector.”

Other organisations in the working group include the Office of the Third Sector, Charity Tax Group, Cancer Research UK, Farrer and Co, HMRC, Philanthropy UK and Universities UK.

It is not the first time the sector has attempted to drum up support for the changes to taxation that would be required for lifetime legacies to take hold here. The most recent meetings were held in early 2005, but the proposals withered on the vine.

Lifetime legacies are common in the United States, where they are known as ‘charitable remainder trusts’. There are 115,000 such trusts with a total value of $104bn.

Directory: Farrer & Co | Cancer Research UK (CRUK) | Charities Aid Foundation | HM Revenue & Customs (HMRC) | Office of the Third Sector
Who's Who: Vibeka Mair

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