Charitable Gift

I have a client unmarried ,no children ,no dependents
Estate will be subject to IHT and is valued at approx £2million
She ultimately wants all assets after specific gifts of approx £300k to go to charity
Her main asset is home and land approx value £1.5million
She wants the sale and distribution of funds to the charity to be suspended at discretion of her executors to allow her current on site long standing tenants to have time to find alternative accommodation. The executors to manage the property including rentals in the interim . I would welcome comments as to how ( if at all ) this could be done without losing charitable IHT exemptions

It all depends on how long the postponement should be for. Perhaps a discretionary trust with two year reading back provisions is an option.

Would it be an option for you/your client to liaise with the proposed recipient charity (assuming it is a single charity that is intended to benefit)? It may be that they are prepared to take a gift of the property subject to sitting tenants for a defined period/on certain conditions. That will of course depend very much on the recipient charity being set up to manage such an arrangement or being able to put arrangements in place. A gift could then be made outright to them under the Will.

Otherwise, as suggested above, a trust utilising s.144 IHTA writing back provisions would at least give up to two years’ grace to the current tenants.

What is the nature of the current tenancy?

Whilst an assured shorthold tenancy (or statutory periodic tenancy) may be terminated upon 2 months’ notice, if the tenancy was granted some years ago it might not be an AST but an older form of tenancy under which the tenants may have security of tenure which cannot be so easily terminated?

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

Landlords in Wales must give six months’ notice to end the contract with a section 173 notice. In most cases, you can only serve it after the first six months of periodic tenancies. For tenancy contracts signed before 1 December 2022, the two-month notice period for no-fault evictions applies until the end of May 2023.

For the Law in Wales as to Notice see here;