Sarah Coles, of stockbroker AJ Bell, said: “People will be considering how to protect their estate from this much-hated tax, whether that’s by making gifts during their lifetime or bequeathing money to charity in their will.”
Families have increasingly looked to charity donations as a way of reducing the size of their estates amid more punitive tax measures from the Labour Government.
Since April this year, 100pc relief for Agricultural Property Relief APR and Business Property Relief BPR were capped at a combined £1m allowance per estate, meaning any value above £1m receives only 50pc inheritance tax relief.
Inheritance tax receipts have more than doubled in a decade, according to AJ Bell, and are expected to jump again next year when unused pensions will become liable for inheritance tax, dragging an extra 10,500 estates into the tax net.
Ian Dyall, head of estate planning at the wealth management firm Evelyn Partners, said: “We have seen a huge increase in interest in making gifts, often from [defined contribution] pension funds that were previously being preserved as they currently are not subject to inheritance tax.”
A Treasury spokesman said: “The UK has a proud history of charitable giving and the tax system rightly helps support those who choose to donate. These reliefs are working as intended, encouraging donations and helping charities continue their vital work.”
