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HMRC internal manual

Inheritance Tax Manual

Procedure: types of gift where it is doubtful exemption will apply

There are several types of organisation on which charity exemption may be deducted where it is doubtful whether that exemption will be due These need to be considered carefully to establish the correct IHT treatment. The types of organisation are:

  • Agricultural and Horticultural Societies
  • Benevolent Funds and Associations
  • Civic Societies
  • Disaster Funds
  • Employment Societies
  • Festival Societies
  • Housing Societies
  • Industrial Welfare Societies
  • Masonic Lodges. General funds of Lodges usually contain charitable funds, these are not charitable. The Relief Chest is however a charitable part of the Masonic Grand Charity and funds deposited with the Relief Chest will qualify.
  • Musical and Dramatic Societies
  • National Trust Centres
  • Private Schools
    • Grant maintained, C of E maintained and R.C. maintained are always charitable
    • Local Authority maintained are always not charitable. However, provided funds are given to the schools expressly for the charitable advancement of education by means of the provision of amenities, facilities etc. which are not normally provided by the LEA, the exemption should be given.
  • Societies where there is a political element
  • Sports Societies and Funds. However, the Charity Commission has announced that it will recognise as charitable ‘the promotion of community participation in healthy recreation by the provision of facilities for playing of particular sports’. Follow the procedures at IHTM11130 if worthwhile and not identified by the Risk Assessors. In addition, some sports clubs may qualify for charity exemption as registered clubs (IHTM11140).
  • Temperance Leagues
  • Trade and Professional Associations or Guilds