Scotland has a great history of philanthropy and we can work with you (and your other advisors) to help form a strategy that will help to maximise the impact of any charitable giving. We can provide you with advice relating to Lifetime giving and legacies, Inheritance tax, and conditional exemptions.
Lifetime giving and legacies
Lifetime giving allows you to donate to your chosen causes during your lifetime which lets you provide guidance and witness the outcome of your generosity. This could be in the form of a cash gift, by transferring assets to an existing charity or good cause or perhaps setting up your own charity (see charity formation). We’ll meet with you to discuss your objectives and assess the best way to achieve them. We advise on the tax allowances and benefits of making charitable gifts during your lifetime and our tax return service can help with the paperwork.
Some people choose to leave a fixed amount and others a proportion of their estate. Legacies are a very valuable source of income to charities. Leaving a legacy to a charity in your Will can be a great way of helping a cause that’s important to you.
Leaving money or assets to charity on your death can be very tax efficient. No Inheritance tax is due on any part of the estate going to a UK registered charity and if you leave more than 10% of your net estate to charity, it can reduce the inheritance rate payable from 40% to 36% (if your estate exceeds the tax free allowances).
For certain assets such as heritage property, works of art and historic artefacts it may be possible to become exempt from paying inheritance or capital gains tax under the Conditional Exemption Scheme. This Scheme exists to protect remarkable or historic items from being sold off privately. The asset must be judged to be ‘preeminent’ for the exemption to apply. When the item is given as a gift or left in a will, as long as the owner complies with the conditions set out in the Scheme, they may become immune to paying the taxes. The main conditions are; keeping the item in good condition and allowing the public access to it.
We can help with applications for conditional exemptions, negotiating with HMRC and dealing with future transfers of the asset.