Giving White Paper

The Giving White Paper, released today, largely repeats the substantive announcements made in the recent March Budget, including the new giving incentive for legacy donations of 10% of one's net estate to charity, and a consultation on possible tax relief for gifts of art Click here to read our recent Budget commentary.

New incentives to give

It is encouraging to see the Government take on board the fact that donors do not give to save tax but do want their giving to be tax-efficient to maximise the impact they can achieve. We and others who advise donors have pressed this point to Government time and again and are gratified to see it being acknowledged so we can move away from the cynical attitude that sees tax relief on donations as a 'reward' to the donor (who has in fact parted with her or his money in the end). Imparting this message effectively to the public will be an important challenge in fostering UK giving.

The actual giving incentives announced in the White Paper are not news - the Budget 2011 announced 10% Inheritance Tax break for those giving 10% or more of their net estate to charity as well as a consultation on reliefs for gifts of works of art. Both consultations are expected to take place in the coming months with that in relation to Inheritance Tax expected to be published on 31 May 2011, with legislation to be included in the Finance Bill 2012.

Foundation Giving

One area of concern arising out of the Giving Green paper was the possibility that the Government might impose a minimum annual expenditure requirement of the sort that is imposed on US private foundations, where charities are not subject to specialist regulatory supervision as UK charities are. We consider that a minimum payout requirement would have been wholly inappropriate to the UK's legal and regulatory landscape, and would have been a short-term solution to an immediate cash need with potential adverse long-term consequences.

It is clear from the White Paper that responses to the consultation on this point were critical of a minimum payout requirement and confirmation that none will be imposed at this stage is most welcome.

Philanthropy Advice

We are delighted to see the Government recognising that high-value giving is an important element to any attempt to encourage UK giving culture - ATM giving and other micro-giving initiatives are exciting and innovative, but any strategy to increase giving needs to attend as well to high-value gifts and the needs of...

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