Legal News | 26.02.26

Protecting your legacy: changes to charitable giving

In 2023, the inheritance tax (IHT) rules for gifts to charities were changed so that only gifts made to charities registered in the UK would qualify for IHT relief, and no longer to those registered in the EU or EEA.

Last autumn’s Budget added further restrictions, this time to charitable trusts.

What are the changes?
Lifetime Transfers (from 26 November 2025)
The 2025 Budget introduced changes so that assets gifted to be held on trust for charitable purposes will no longer be IHT exempt unless the recipient trust itself is registered as a UK charity. This is the case even where that trust may have genuine charitable purposes.

Wills (where death occurs after 6 April 2026)
The new rules apply for gifts made on death occurring on or after 6 April 2026, in such cases gifts will no longer be IHT exempt unless the recipient charitable trust is UK registered.

Who will be impacted?
The changes will impact those who have made a Will leaving a gift on trust for charitable purposes (as opposed to a specific gift to a named UK registered charity, for example).

In order for the executors to claim the IHT exemption following these changes then, provided the terms of the Will allow, they will likely need to:
• Distribute the gift directly to one or more UK registered charities before the second anniversary of death; or
• Register the trust created by the Will to meet the new conditions.

This announcement was a less well-publicised part of the Autumn Budget and so it is important for those potentially impacted to review their existing Wills. Whilst the Government estimates that the number of those affected will be very few, in practice the number may be far greater.

At Wansbroughs, a member of our Private Client team will be able to assist you; please contact us at wealth@wansbroughs.com.