How to encourage charitable donation when drafting wills

In today’s society people have been misled over the perception that tax reliefs are a major influence as to why people give to charity. However, a recent survey undertaken by Ipsos MORI on behalf of HM Revenue and Customs (HMRC), proves that theory to not be so clear cut.

The survey consisted of 32 interviews conducted by Ipsos, with higher and additional rate taxpayers who were earning a minimum salary of £100,000. Those who took part, all were previously concerned for the wellbeing of charities if tax relief was to be abolished, which was soon to be altered.

Those interviewed by Ipsos, which questioned the donors on their awareness of available tax reliefs, were found to be unclear on the process of tax relief and had held long lived misconceptions about how the reliefs were divided between the charity of choice and the donor; some being totally unaware a division was even existent at all. However, the majority of those interviewed were aware of leaving a legacy to charity and payroll giving, though awareness of social investment tax relief was miniscule.

When investigating the impact of gift aid on charitable behaviour, it was found there is little correlation between tax reliefs being a motive for a donation, making little or no impact on their decision. Out of the collated evidence, it was prevalent that tax relief did occasionally affect the generosity of the amount that donors granted.

What does this mean for will writing?

The studies that took place may prove that donations in wills that appear generous could be a result of qualification in terms of tax relief. However, it is important to note that the survey found little or no link in terms of gift aid being a motivation for the donation; the revenue and well-being of the charity being the major concern.

This survey allows will writers to be more clued up on the motives of charitable behaviour when dealing with tax relief and investigating any donations. The current system in place and level of awareness is unlikely to alter the current amount of donations witnessed or the amount of cases, where relief is available.

What do people think of this?

The current system in place was favoured by the majority of respondents, claiming it is beneficial to the both the donor and the charity. With the majority supporting the system in place, some thought to note suggestions that would see charities able to claim all tax relief on a donation; this being a change that could see charities potentially lose out.

The majority were also keen to reject the idea that charities should be stripped of basic tax relief, as it would remove crucial income; the donors not being able to make this up.

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