Significant changes to inheritance tax (IHT) rules are coming into force on 6 April 2026, and they could have an impact on anyone who intends to leave money to charity in their Will. These reforms alter the way the IHT charity exemption works and may unexpectedly bring some charitable gifts into charge unless the Will is reviewed.
The updated rules will restrict the IHT charity exemption so that relief only applies where assets pass directly to a named UK charity. Gifts that pass into a discretionary trust, or Wills that simply direct property “for charitable purposes” at the discretion of executors or trustees, may no longer qualify for the exemption under the new legislation.
It is common for people to include charitable gifts in their Will that allow trustees flexibility to choose which charities to support, often guided by a letter of wishes. However, under the new rules, this type of wording could result in the gift losing its tax‑free status, potentially increasing the overall IHT liability on the estate unless steps are taken.
In practical terms, this means that if your Will includes leaving money to charity—and especially if it does not name a specific charity in the UK or it leaves money to a sports or other type of club—you may need to have it reviewed to ensure your gift still qualifies for the intended tax relief. Without updating your Will, your estate may face unintended tax charges, and the charity may ultimately receive less than you intended.
With these changes imminent, now is an ideal time to revisit your Will, confirm that your charitable wishes are protected, and ensure your estate remains tax‑efficient under the new rules.
If you have any concerns or questions please contact our Wills, Trusts, Capacity and Probate team who will be happy to talk to you about these changes and how they may impact you. Call us today on 01788 579579 or email us at info@brethertons.co.uk or contact us through our website to arrange an appointment.
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