The chancellor of the exchequer has asked the Office for Tax Simplification to review gifts in the inheritance tax system.
In a letter published earlier this week, Philip Hammond said that the inheritance tax system was “complex” and needed an overhaul.
He said a review could look at “how current gift rules interact with the wider inheritance tax system, and whether the current framework causes any distortions”.
Gifts to charities in wills are currently exempt from inheritance tax, and individuals who leave more than 10 per cent of their estate to charity receive a 10 per cent reduction in the total amount of inheritance tax they pay.
It is not clear whether the chancellor expects a direct review of donations, although it is likely that his primary focus is on gifts of money and property to spouses and children, and how they are used to reduce inheritance tax liability.
However even if the changes do not directly affect charitable reliefs, any changes to inheritance tax law will inevitably have significant effects on how much money is left to charity.
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