The Charity Finance Directors' Group has claimed victory in persuading the government to scrap plans for a 55 per cent tax on pension fund legacy donations.

Late last year the government released a consultation on removing the requirement for individuals to annuitise their pension funds by the age of 75, a document which included proposals for the 55 per cent tax.

Policy officer Chris Wood said: "CFDG led efforts within the charity sector to lobby government on this issue. As well as talking to our members and professionals, we contacted key individuals at the Treasury to ask that the proposal be reconsidered, which is what has now happened.

Referring to the announcement in the draft Finance Bill 2011, he added:  "Legacy donations from unused pension funds will now be tax-free."

Finance Bill's approach praised

CFDG has also praised the decision to release the Finance Bill as a draft consultation and the consideration it gives to the impact of its provisions upon charities.

Policy officer Melora Jezierska said: “We are delighted to see that the Government has heeded our calls to include ‘impact on the third sector’ within the Summary of Impacts in the new Tax Information and Impact Notes.  

“This was a key recommendation in our Tax Policy Making consultation response.  

She added: “However, we would like to see this fully utilised for the benefit of the sector and used more widely across other areas of policy making.”