IHTM11124 - Procedure: straightforward gifts and acceptable bequests
A gift is straightforward if it is expressed as being given absolutely and unconditionally to a charity (IHTM11112). Sometimes expressions of intent or wishes are attached to the legacy. This does not necessarily prevent them from being straightforward.
A gift is considered not to be straightforward where
- it is expressed to be for a special purpose (IHTM11175), or
- it is for a subsidiary fund (IHTM11126) of an organisation
- some element of avoidance of tax (IHTM11171) appears to be involved
- a family or private (IHTM11130) charity is involved
Be careful to identify the particular beneficiary involved, for example, a bequest to Amnesty International is not a gift to Amnesty International UK Section Charitable Trust. Remember that many ‘non-charitable’ organisations have a sister charity.
You should accept a gift by the deceased’s will (IHTM12041) as being exempt (assuming the beneficiary is accepted as a charity (IHTM11112)) provided
- it is not subject to a condition (IHTM11175) which is not satisfied within twelve months after the transfer
- it takes effect in possession immediately (IHTM11174) on the death
- it is not defeasible (IHTM11173) (for example, a gift which can be revoked or terminated by a future event)
- it may not become applicable for other than charitable (IHTM11172) purposes
- it consists of either the whole (IHTM11176) of the deceased’s interest in an asset, or the whole of some lesser interest for example, deceased’s half share of an asset
Example 1
Amy dies.
By Will she leaves the residue of her estate to Liam for life. On Liam’s death it passes to a qualifying charity.
Do not accept. The gift is not exempt on Amy’s death because the gift to the charity does not take effect in possession immediately on her death.
Example 2
Amy dies owning the freehold interest in the whole of ‘The Manor’.
By Will Amy makes a gift of a half share in ‘The Manor’ to a qualifying charity absolutely.
Accept. The gift is of the whole of the deceased’s interest in the half share.
Example 3
The facts are as in Example 2.
By Will Amy makes a gift of ‘The Manor’ to a qualifying charity for 20 years.
Do not accept. The gift is not of the whole of the deceased’s interest in the property because it is for a limited period of time.