What the next Government could mean for legacies

With the election little over a week away, in this short blog, we look at what the next Government could mean for legacies.

While we can all make our best guess about which political party might end up taking the reins, without a crystal ball, it’s impossible to know exactly what the Government line-up will look like and how this might influence legacies. But we can certainly take a punt and here our director Lucinda Frostick summarises a few ways the political landscape could impact the charitable legacy market. 

Legacy values

On the whole, the legacy market tends to mirror economic trends, with property prices, stocks and shares all inflating legacy values. With that in mind, a strong, stable government with a focus on continued economic recovery will be crucial. But, as Doug Clow, Legacy Futures' Head of Analysis points out in this viewpoint, analysts have all based their forecasts and predictions in line with recent polls already. So, while a July election might have caught us off guard, the long-term economic outlook for legacies is unlikely to be much changed from previous forecasts. Legacies are predicted to grow to around £10 billion a year by 2050 and, with more people choosing to leave a gift in their Will each year, they are expected to remain one of the top sources of voluntary income for an increasing number of charities. If Labour takes the reins, their number one priority from their manifesto is to restore economic stability and that would most certainly be a welcome focus for legacy growth. 

Focus on philanthropy and longer-term funding

Within the pre-election period, both Conservative and Labour party leaders have underlined the importance of increasing philanthropy, pledging to work more closely with the charity sector. At NCVO’s civil society hustings, Stuart Andrew, the Conservative’s minister for Civil Society, stressed the importance of collaboration, with Lilian Greenwood, shadow minister for arts, heritage and civil society, emphasising the need for longer-term partnerships and support that is both scalable and sustainable. A Government that highlights the need for longer-term funding streams may well be more open and receptive to supporting legacy giving and collaborating with the sector as we continue to grow the market. 

Fiscal incentives

While Inheritance Tax has been the subject of much debate over the past year, it has warranted relatively few mentions in the party manifestos. The exception is of course Reform UK, which has suggested that the ‘grief tax’ is abolished for estates under the value of £2m and is charged at 20% above that, with the option of donating that amount to charity.

At Remember A Charity, we’ve long stressed the importance of protecting (and potentially even broadening) the fiscal incentives on IHT. We know that these incentives can be a crucial factor for legacy giving, encouraging people to give and to give more generously, and – most importantly – leading professional advisers to highlight the charitable option to clients as a matter of course. As such, we breathed a sigh of relief when the abolition of IHT wasn’t included in the Conservative manifesto. However, this doesn’t mean the proposal won’t be raised at any point in the future.

So, we’ll be looking to the next Government to make a firm commitment to protect and preserve the IHT incentives for legacy giving. We're also keen to explore whether there’s an opportunity for people below the IHT threshold that leave a charitable gift in their Will to access alternative fiscal incentives.

Keeping legacy income flowing

Beyond the fiscal incentives, if there’s just one ask we have of the new Government, this will be to ensure legacy income can keep flowing with a well-resourced probate department at HMCTS. Although the Probate Inquiry had to be wrapped up a little early when the election was called, the past 8 months of public probate records show that huge improvements have been made in the number of grants issued and in waiting times. Certainly, there are further improvements that could be made, but the backlog is coming down and it’s so important that the Probate Registry has the recognition, resources and capacity needed to keep building on the progress made.  

What next? 

Once the new ministers are in post, we’ll be working with our colleagues at the Chartered Institute of Fundraising to reach out to ministers and shadow ministers alike to make our voice heard and ensure they understand the importance of legacies in building a stronger, better and more sustainable future. 

Of course, a new Government is just the start – an opportunity to build new relationships and strengthen existing ones, and to convey just how crucial legacies have become to so many UK charities in generating long-term, significant and sustainable funding streams. We’ll be on the lookout for any proposed changes to sector policies through to legislation on Wills (such as the long-awaited Wills Act, expected in early 2025).

Beyond Westminster, we'll be continuing to engage with Scottish Government around relevant issues, such as the high cost of accessing Wills, which is a barrier when it comes to the delivery of a charitable legacy notification service in Scotland. And, although not directly related to the upcoming UK Parliament elections, this will be an important issue for us in the lead up to the Scottish Parliament elections in 2026.

The upcoming changes in Government bring a key opportunity for us to inspire ministers and civil servants alike to help us pull the levers that really will drive change, nurturing the UK legacy environment and normalising this very special form of giving.