SolvedIHTM11101 | Gifts to charities or registered clubs: introduction
From HM Revenue & Customs · Inheritance Tax Manual
Transfers to qualifying charities or registered community sports clubs (CASCs) are exempt for Inheritance Tax purposes. More specifically, IHTA84/S23 exempts a transfer of value (IHTM04024) to the extent that the value transferred (IHTM04028) is attributable to property which is given to charities or registered clubs (IHTA84/S23 (1)).
Property is given to:
charities if it becomes the property of charities (IHTA84/S23 (6) (a)).
registered clubs if it becomes the property of registered clubs (IHTA84/S23 (6) (b)).
Prior to changes made in FA 2026, property was also considered as “given to charities”, if it was held on trust for charitable purposes only. This also applied to property being given to registered clubs, where it was held on trust for registered clubs only. After the following dates, the exemption no longer applies to transfers where property is held on trust for charitable purposes/registered clubs only:
For transfers made on a person’s death, on or after 6 April 2026.
For transfers at any other time, on or after 26 November 2025.
The exemption has no value limit. It applies to both lifetime and death transfers, including transfers of settled property in which the deceased/transferor had a qualifying interest in possession. Following the FA 2026 changes to IHTA84/S23 transitional easement provisions were introduced of how the exemption works on the cessation of a qualifying interest in possession (IHTM11165)
This particular section of guidance looks at:
Where the deceased died on or after 6 April 2012 and left at least 10% of their net estate to beneficiaries that qualify for charity exemption under IHTA84/S23(1), the rate of tax is reduced to 36%. The reduced rate only applies to transfers on death. Guidance on the application of the reduced rate is at IHTM45001 onwards.