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 British Section Charitable Trust. Remember that many ‘non-charitable’ organisations have a sister charity
- 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
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.
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.
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.