A change affecting deaths from 6 April 2026 means some charitable trusts need legal paperwork to secure relief. Existing wills may need checking, and executors could face an upfront tax bill.
Eleanor HartleyEditor
If your will leaves money to trustees to choose charities later, the gift may no longer qualify automatically for inheritance tax relief. According to The Telegraph, changed rules apply to deaths on or after 6 April 2026 and can require trustees to complete legal paperwork within two years. HMRC says donations to UK-registered charities remain exempt, including gifts through trusts that meet certain conditions.
The Telegraph reported on 15 September 2026 that the government had changed the tax treatment of gifts left to trustees for charitable purposes. The distinction is between leaving a gift directly to a named charity and leaving trustees to decide which charities should receive it.
Under the previous approach described by the newspaper, HMRC treated gifts held for charitable purposes as wholly exempt where a separate letter of wishes guided trustees on which charities to choose. That arrangement gave the person making the will flexibility without having to settle every recipient in advance.
For affected trusts, the newspaper says HMRC will now treat money or property as taxable unless trustees execute a deed of appointment giving it to charities within two years of death. This is legal paperwork, not simply a note recording the deceased person's charitable intentions.
The change has two commencement dates. According to the report, it applies to lifetime transfers from 26 November 2025 and to transfers on death from 6 April 2026. A will written before those dates therefore needs checking rather than assuming its age protects the intended tax treatment.
The potential exposure is inheritance tax at the standard 40% rate, although an estate's actual liability depends on its available allowances and exemptions. The report does not mean every charitable trust gift automatically loses 40% of its value, or that all charitable donations have become taxable.
A direct charitable legacy identifies the organisation that should receive the gift. A trust can instead leave decisions to trustees, within the terms governing the trust, allowing them to select organisations working towards particular causes.
The Telegraph explains that this flexibility can support charities that did not exist when the arrangement was created. It can also allow charitable funding to continue over time, rather than requiring the entire gift to go immediately to a recipient chosen years earlier.
A letter of wishes generally guides trustees but is not legally binding in the same way as the trust's governing terms. If your arrangements rely on one, the important question is whether the will and trust meet the tax conditions, not simply whether the letter clearly expresses charitable intentions.
Under established UK rules, qualifying charitable gifts are exempt from inheritance tax. Separately, leaving at least 10% of the relevant net estate to charity can reduce the inheritance tax rate on the qualifying part of the remaining estate from 40% to 36%.
That is a four-percentage-point reduction in the rate, not a blanket exemption for the rest of the estate. The calculation uses a defined net amount, so it should not be assumed that a donation worth 10% of everything you own will always be the right figure.
The standard inheritance tax nil-rate band is £325,000. An additional residence nil-rate band of up to £175,000 may apply when a qualifying home passes to direct descendants, subject to conditions; this additional allowance tapers for estates worth more than £2m.
Transfers between spouses or civil partners are generally exempt, and unused allowances can potentially transfer to the survivor. Together, these rules can allow a qualifying couple to pass on up to £1m tax-free, but that figure is not a universal allowance for every couple.
Inheritance tax is normally due by the end of the sixth month after the month of death, with interest generally charged on unpaid tax after that deadline. The two-year period reported for charitable appointments is therefore longer than the ordinary tax-payment timetable.
Executors handle the estate's administration, while trustees make decisions under the trust, although the same people may perform both roles. They may need to coordinate the appointment and tax return early enough to avoid an estate paying tax that it later seeks to recover.
HMRC told The Telegraph that the measure is intended to prevent charitable trusts being used for tax avoidance rather than charitable giving. Its position is that genuine charitable legacies remain protected, with gifts through trusts continuing to qualify when the relevant conditions are met.
Emma Chamberlain, of the Chartered Institute of Taxation, questioned the breadth of the measure. According to the report, she argued that concerns about foreign charitable trusts could have been addressed more narrowly and warned that ordinary domestic wills were being caught; she called for the government to amend the rules.
There is also disagreement over how many people will need to act. The Telegraph says the government expected fewer than 50 individuals to need to restructure their charitable giving, while law firm Mishcon de Reya expected substantially more.
Alice Cochrane, of Mishcon de Reya, warned that people whose wills were prepared under the previous rules might not know they needed reviewing. Victoria Mahon, a private client partner at Wedlake Bell, highlighted a separate practical risk: executors could have to pay tax initially and reclaim it later, creating cash-flow pressures and administration costs.
The Telegraph reports an existing change, rather than a proposal awaiting consultation. The immediate deadlines depend on when a lifetime transfer took place or when someone died; the report gives no separate universal deadline for rewriting existing wills.
Chamberlain's call for amendments is not a government commitment to reverse the measure. Neither a reversal date nor a timetable for further changes is identified in the report, so affected estates should assess their position under the rules described rather than wait for a possible concession.
For individual families, the unresolved questions are specific: whether the trust qualifies, what paperwork is required and whether tax must be paid before relief is secured. Our inheritance tax coverage follows the wider rules, but those questions require a review of the actual will and trust documents.
A charitable gift can reflect decisions made many years before an estate is administered. If the will relies on trustees choosing recipients later, the tax outcome may now depend on legal steps being completed after death, not just the deceased person's intentions. For families and executors, checking those arrangements can help identify both a possible tax charge and the money needed to pay it while relief is being resolved. Direct charitable gifts remain exempt when they qualify.
Yes. HMRC says donations to UK-registered charities remain exempt, including gifts through trusts that meet certain conditions. The reported change concerns the conditions for charitable trusts, not the abolition of relief for charitable gifts.
According to The Telegraph, the changed rules apply to lifetime transfers from 26 November 2025 and to deaths on or after 6 April 2026.
Potentially. The rules for transfers on death depend on the date of death, not simply when the will was written. Ask an adviser to review the will, trust terms and any letter of wishes together.
The Telegraph reports that affected trustees must execute a deed of appointment giving assets to charities within two years of death to secure relief. This does not extend the ordinary inheritance tax payment deadline.
You should not assume so. A letter of wishes generally guides trustees rather than binding them. Under the change described by The Telegraph, affected trusts need a deed of appointment to secure gifts for charities.
Yes, that is a risk highlighted by Wedlake Bell's Victoria Mahon. Tax is normally due by the end of the sixth month after the month of death, earlier than the reported two-year appointment deadline.
Under established UK rules, leaving at least 10% of the relevant net estate to charity can reduce the rate on the qualifying remaining estate from 40% to 36%. The calculation is not simply 10% of everything you own.
This article is general information, not financial or legal advice. Speak to a regulated adviser about your circumstances.
