Philanthropy Impact

Inspiring philanthropy and social investment across borders, sectors and causes

Encouraging Government to Innovate

Report
October 2018
Philanthropy Impact and Charitable Remainder Gift Committee
0n the 15th of October Simon Weil, Partner Bircham Dyson Bell and Richard Cassell, Partner Withers along with John Pepin, Chief Executive Philanthropy Impact successfully presented to the HMRC Charity Tax Forum our paper on the Charitable Remainder Gift (CRG).  
 
We pointed out that:
  • Individual giving has generally been flat for a number of years.
  • The median annual amount given is just £240-£500 for (U)HNWI.  In fact, only 5% of the UK’s 400,000 millionaires give at a level that could be considered generous.
We encouraged greater innovation around the existing reliefs to create new opportunities for individuals and their advisers to engage in philanthropic giving and social investment.  This would lead to greater individual giving. 
 
We outlined a number of principles that should underpin approaches to tax relief in support of philanthropic giving. 
 
In summary:
  • Proposals to introduce CRG to the UK have been under discussion for a number of years. Recently, the proposal has gained considerable support from the professional services industry. More than 60 delegates gathered at the Royal Society of Arts in London on 1 November 2017 to discuss and explore this topic.  Many of the delegates represented a number of professional organisations, including law firms, banks, and other professional advisers, philanthropists, as well as charities, both large and small.
  • When making a CRG the donor makes an irrevocable commitment to give to charity.  The sum is put into a suitable vehicle from which the donor receives an income during their lifetime. This income is subject to Income Tax. However, the initial investment is deemed to be a gift to charity for the purposes of Capital Gains Tax and Inheritance Tax.  The donor also benefits from a one-off calculation of Income Tax relief for backward or forward offset.  The benefits for charities are that it creates supporter engagement with a living person and the charity is guaranteed future income which is not the case with a legacy pledge made in a Will. The donor benefits as he or she has financial security for life whilst having made a gift to charity.  

Philanthropy Impact, on behalf of the CRG coalition, also submitted the CRG paper to the Budget representatives Team HM Treasury, copied to DCMS.

 
For further information or to get involved please contact John Pepin at john.pepin@philanthropy-impact.org