CIOT: Charitable giving tax breaks are too complex

Date: 5th September 2011

Tax breaks offered to individuals leaving money to charity are too complex, it has been claimed.

The Chartered Institute of Tax (CIOT) has said that while the coalition's efforts to encourage charitable giving are admirable, they are too complex.

According to the organisation, HM Revenue and Customs had to reissue one of its examples after getting it wrong in the first instance.

The CIOT says that the proposals are unnecessarily complex, act as a "perverse disincentive" and ignore the burden of compliance costs.

Martyn Gowar, chairman of the CIOT's Succession Taxes Sub-Committee, commented: "As currently structured, the government's proposals provide an effective 76 per cent relief from inheritance tax at the point where exactly a tenth of the net estate is given to charity.

"For taxpayers other than those on the highest rate ... the siren sound of the difference between what they can save in tax by donating as a legacy, and what they can save in tax by donating during their life, will tempt them to stop lifetime giving, with potentially very damaging consequences for charities."

Posted by Jacob Williams