Charitable Legacies and the 36% Inheritance Tax Rate

Charitable gifts left in wills are exempt from inheritance tax, and an estate that leaves at least 10% of its net value to charity is taxed on the remainder at 36% rather than 40%. This briefing sets out what the official statistics show about how large that charitable slice has become and how many estates it reaches.

Two data pictures sit side by side. HM Revenue and Customs records charitable transfers claimed against inheritance tax, a measure limited to the minority of estates large enough to be assessed for the tax. The legacy-fundraising sector, measured by Smee & Ford and Legacy Futures, tracks every charitable bequest at probate, most of which come from estates below the tax threshold. Read together, they show a large and growing charitable-legacy market in which the 36% incentive is directly relevant only to a small, wealthier segment. All figures are dated at their point of use and are current as at July 2026.

Executive summary

• The value of transfers to qualifying charities exempted from inheritance tax rose to £1.94 billion in 2023 to 2024, from £1.92 billion in 2022 to 2023, across 10,400 UK estates (HMRC, Inheritance Tax liabilities statistics, 30 July 2026).
• The cost of inheritance tax relief on charitable donations reached £1.28 billion in the tax year ending April 2026, up 6% year on year (HMRC, UK charity tax relief statistics, 1 July 2026).
• 4.72% of UK deaths resulted in an inheritance tax charge in 2023 to 2024, equivalent to 30,400 estates, or fewer than 1 in 20 (HMRC, 30 July 2026).
• UK legacy income for charities was an estimated £4.4 billion in 2025, with a long-term annual growth rate of 4.3% (Smee & Ford and Legacy Futures, Legacy Giving Report 2026).
• An estimated 104,000 charitable bequests were made in 2025, down 11% on 2024 as the pandemic-era probate backlog cleared (Legacy Giving Report 2026).
• Charitable estates numbered an estimated 44,000 in 2025, the second highest level on record (Legacy Giving Report 2026).
• The reduced 36% rate, available where 10% or more of the net estate passes to charity, applies to estates that die on or after 6 April 2012 (HMRC, Inheritance Tax Manual IHTM45001).
• The Office for Budget Responsibility forecast total inheritance tax receipts of £8.7 billion in 2025 to 2026, about 0.7% of all receipts (OBR, November 2025 forecast).

Key findings

1. The value of exempted transfers to qualifying charities was £1.94 billion in the UK in 2023 to 2024 (HMRC, Inheritance Tax liabilities statistics, 30 July 2026).
2. 10,400 UK estates claimed the inheritance tax charity exemption in 2023 to 2024 (HMRC, 30 July 2026).
3. The charity exemption value rose only marginally, from £1.92 billion in 2022 to 2023 to £1.94 billion in 2023 to 2024, a change of about 1% in the UK (HMRC, 30 July 2026).
4. The cost of inheritance tax relief for charitable donations was £1.28 billion in the tax year ending April 2026 across the UK (HMRC, UK charity tax relief statistics, 1 July 2026).
5. Total tax reliefs for charities and their donors were around £7.4 billion in 2025 to 2026, up 4% year on year (HMRC, 1 July 2026).
6. 30,400 UK estates faced an inheritance tax charge in 2023 to 2024, representing 4.72% of deaths (HMRC, 30 July 2026).
7. UK legacy income for charities reached an estimated £4.4 billion in 2025 (Legacy Giving Report 2026, Smee & Ford and Legacy Futures).
8. Legacy income grew about 9% in 2024 to an estimated £4.5 billion, the year the probate backlog cleared (Legacy Giving Report 2025, reported by Civil Society).
9. An estimated 145,000 charitable bequests were recorded in the UK in 2024, described as the highest number ever recorded (Legacy Giving Report 2025). The later Legacy Giving Report 2026 estimates 104,000 bequests in 2025, down 11% on 2024 (Legacy Giving Report 2026); an 11% fall from 104,000 implies a revised 2024 base of about 117,000 (104,000 ÷ 0.89, a derived figure), lower than the earlier 145,000 estimate, so the two reports' bequest counts are different vintages and are not a like-for-like annual pair.
10. Charitable estates rose 22% in 2024 to a record 46,000, then eased to an estimated 44,000 in 2025 (Legacy Giving Report 2025; Legacy Giving Report 2026).
11. Legacies represented 30% of all fundraising income and 14% of total income for the 1,000 charities in England and Wales that receive the most legacy money in 2024 (Legacy Giving Report 2025).
12. Nearly 18% of probated estates on the South Coast contained a legacy gift in 2024, above the national pattern, indicating a geographic concentration of charitable wills (Legacy Giving Report 2025).
13. The reduced 36% inheritance tax rate has applied since deaths on or after 6 April 2012 for estates leaving at least 10% of the net estate to charity (HMRC, Inheritance Tax Manual IHTM45001).
14. Total UK inheritance tax receipts were forecast at £8.7 billion in 2025 to 2026 by the Office for Budget Responsibility (OBR, November 2025).

How the 36% rate works

Inheritance tax is charged at a standard rate of 40% on the value of an estate above the available tax-free thresholds. Where an estate leaves 10% or more of its net value to charity, the rate on the taxable part falls to 36% (gov.uk, Inheritance Tax, as at July 2026). Gifts to qualifying charities are themselves exempt from inheritance tax, so the charitable amount is deducted before tax and, if it clears the 10% test, also lowers the rate on everything else.

The 10% test is measured against the "baseline amount", broadly the estate that would be taxed after deducting other reliefs, exemptions and the nil-rate band, but before the charitable gift itself (HMRC, IHT430 reduced-rate schedule). The relief was introduced for deaths on or after 6 April 2012 (HMRC, Inheritance Tax Manual IHTM45001).

Source: gov.uk/inheritance-tax, UK, as at July 2026, subject to change. Thresholds are frozen until the end of the 2030 to 2031 tax year, a freeze extended at Budget 2025 on 26 November 2025 (gov.uk).

The charity exemption in the tax data

HMRC statistics capture only estates assessed for inheritance tax, so they describe the wealthier tail of charitable giving at death rather than the whole. Within that tail, the exempted charitable amount has been broadly stable in cash terms across the two most recent years, while the number of estates using it remains close to 10,000.

Source: HMRC, Inheritance Tax liabilities statistics, published 30 July 2026, UK. HMRC notes uncertainty in the most recent years because a small number of large estates can move the totals.

A second HMRC series, the charity tax relief statistics, measures the cost of the relief rather than the value transferred. That cost reached £1.28 billion in the tax year ending April 2026, up 6% year on year, and forms part of around £7.4 billion of total charity tax reliefs (HMRC, UK charity tax relief statistics, 1 July 2026). The two series are not directly comparable: one is the exempted transfer, the other is the modelled tax forgone, and they cover different reference periods, so they should be quoted separately. HMRC attributes recent movement to a rise in the number of estates above the nil-rate band claiming the exemption.

The legacy market beyond the tax threshold

Most charitable bequests come from estates too small to pay inheritance tax, so the fundraising-sector data describes a far larger population than the HMRC series. The market measure comes from Smee & Ford, which reviews grants of probate, with modelling by Legacy Futures. These are estimates drawn from probate records and are revised as data matures, so they carry more uncertainty than the official statistics.

Sources: Legacy Giving Report 2025 (2024 column) and Legacy Giving Report 2026 (2025 column), Smee & Ford and Legacy Futures, UK. Figures are estimates and subject to revision. Note on bequests: the Legacy Giving Report 2026 reports 104,000 bequests in 2025 as down 11% on 2024, which implies a revised 2024 base of about 117,000 (104,000 ÷ 0.89, a derived figure), lower than the 145,000 the Legacy Giving Report 2025 recorded for 2024. The two bequest counts are therefore different report vintages and are not a like-for-like year-on-year comparison.

The 2024 surge and the 2025 easing largely reflect the timing of probate rather than a change in giving behaviour: a backlog cleared through 2024, inflating recorded bequests, then normalised in 2025 (Legacy Giving Report 2026). For the largest recipients the money matters disproportionately: legacies were 30% of all fundraising income and 14% of total income for the top 1,000 legacy charities in England and Wales in 2024 (Legacy Giving Report 2025). The comparison between years is complicated by the probate distortion, so single-year changes should be read as indicative rather than precise.

Forecasts and fiscal context

Two forward-looking signals frame the topic. On the charity side, the legacy market is projected to keep growing; on the tax side, frozen thresholds are drawing more estates into inheritance tax, which enlarges the group for whom the 10% test is financially relevant.

• UK legacy income is forecast to reach £5 billion by 2029 and £10 billion by 2046, on the Legacy Futures long-term model (Legacy Giving Report 2026).
• Inheritance tax receipts were forecast at £8.7 billion in 2025 to 2026, about 0.7% of all receipts (OBR, November 2025 Economic and Fiscal Outlook).
• The nil-rate band has stood at £325,000 since 2009 and is set to remain frozen to the end of 2030 to 2031, a freeze extended at Budget 2025 (OBR, November 2025; gov.uk, Budget 2025).

These are forecasts and projections, not outcomes. The legacy figure rests on demographic and probate modelling by a market provider, and the receipts figure on OBR assumptions about asset prices and mortality, both of which can be revised. They are presented as directional context, not as certainties.

Original synthesis

The following figures are Fairchild Oldfield estimates derived by combining published datasets. They are models, not official statistics, and each carries the limitations noted. They are offered to help interpret the data, not as precise measures.

1. Average exempted charitable transfer per taxable estate (estimate)

Estimate: about £186,000 per estate, 2023 to 2024. Logic: the £1.94 billion of exempted charitable transfers divided by the 10,400 estates that claimed the exemption. Inputs: HMRC, Inheritance Tax liabilities statistics, 30 July 2026. Limitation: this is a mean, pulled upward by a small number of very large estates, so it is not a typical gift; it reflects only estates assessed for inheritance tax and excludes the far larger number of non-taxpaying charitable estates.

2. Average legacy per charitable bequest (estimate)

Estimate: about £42,000 per bequest, 2025. Logic: £4.4 billion of legacy income divided by 104,000 charitable bequests. Inputs: Legacy Giving Report 2026, Smee & Ford and Legacy Futures. Limitation: both inputs are estimates from the same source and reference period; the figure blends large residuary gifts with small pecuniary ones and does not separate them; it mixes taxpaying and non-taxpaying estates.

3. The incentive-reach gap (estimate)

Estimate: only about one in four charitable estates claims the inheritance tax charity exemption, so the 36% incentive is directly relevant to a minority. Logic: 10,400 estates claimed the charity exemption in 2023 to 2024, against an estimated 44,000 charitable estates in 2025 and 30,400 taxpaying estates in 2023 to 2024; 10,400 divided by 44,000 is about one in four. Because the two series use different years and definitions, this is an order-of-magnitude comparison, not an exact ratio. Inputs: Legacy Giving Report 2026 and HMRC, Inheritance Tax liabilities statistics, 30 July 2026. Limitation: charitable-estate and taxpaying-estate counts are not a like-for-like subset, the years differ, and an estate can be charitable without claiming the exemption in HMRC's data; the comparison shows scale, not a precise overlap.

4. Taxable-slice growth versus market growth (estimate)

Estimate: the tax-exempt charitable slice grew about 1% between 2022 to 2023 and 2023 to 2024, far slower than the roughly 9% growth in the wider legacy market in 2024. Logic: the HMRC exempted-transfer value moved from £1.92 billion to £1.94 billion, while the Smee & Ford legacy-income estimate rose about 9% in 2024. Inputs: HMRC, 30 July 2026 and Legacy Giving Report 2025. Limitation: the two series use different reference periods (tax year versus calendar year) and different methods, the 2024 market figure is inflated by the probate backlog, and HMRC flags year-to-year volatility from large estates, so the gap is indicative of where growth is concentrated, below the tax threshold, rather than an exact differential.

Recommended charts

Suggested visualisations for reuse. Data and sources are listed so each can be rebuilt independently.

1. Two measures of charitable giving at death. Grouped bars comparing HMRC exempted transfers (£1.94bn, 2023-24) with the wider legacy market (£4.4bn, 2025). Source: HMRC IHT liabilities statistics; Legacy Giving Report 2026. Insight: the tax data captures under half of the money and a small fraction of the estates. Citation-worthy because it corrects a common conflation of the two figures.
2. Charity exemption value versus estates, 2022-23 to 2023-24. Dual-axis line: exempted value (£1.92bn to £1.94bn) and estates (to 10,400). Source: HMRC IHT liabilities statistics, 30 July 2026. Insight: stability at the top of the distribution. Useful as a clean official-statistics reference.
3. The probate-backlog effect on bequests. Charitable bequests fell an estimated 11% to about 104,000 in 2025 as the backlog cleared (Legacy Giving Report 2026). The earlier Legacy Giving Report 2025 recorded a higher 2024 estimate of 145,000, since revised, so plot the two report vintages as separate series rather than joining them into one line that would overstate the fall. Insight: a timing artefact, not a behavioural collapse.
4. Legacy income trajectory to 2046. Line with forecast: £4.4bn (2025) to £5bn (2029) to £10bn (2046). Source: Legacy Giving Report 2026. Insight: the long-run growth case. Label clearly as a forecast.
5. Where inheritance tax sits in the fiscal picture. Single stat or small bar: £8.7bn receipts, 0.7% of all receipts, 2025-26. Source: OBR, November 2025. Insight: a small but rising tax, context for why the 10% test reaches more estates over time.

Methodology

Source selection prioritised primary official statistics: HMRC for inheritance tax and charity tax reliefs, and the OBR for fiscal forecasts. Market scale, which official statistics do not measure, was taken from the Smee & Ford and Legacy Futures Legacy Giving Reports, the recognised sector series, and tier-labelled as market research rather than official data. Secondary reporting (Civil Society, ehospice, UK Fundraising) was used only to source figures traceable to those named reports.

Inclusion required a named source, a stated reference period and a UK or England and Wales geography. Where two series measured related but distinct things, such as the exempted transfer value against the modelled cost of relief, they are reported separately and not merged. Where figures conflicted, the more recent primary release was preferred and the discrepancy stated. Estimates derived by Fairchild Oldfield are labelled as estimates or models at every point of use, with inputs and limitations shown.

Data limitations: HMRC cautions that inheritance tax charity figures for recent years are uncertain because a small number of large estates can move the totals; legacy-market figures are probate-based estimates revised as data matures; the 2024 bequest and estate counts are inflated by the clearance of a probate backlog and are not directly comparable with 2025. Forecasts from the OBR and Legacy Futures are projections, not outcomes. Last updated July 2026; figures are subject to change.

Source quality ranking

For journalists

Most quotable statistics

• £1.94 billion of charitable transfers were exempted from inheritance tax in the UK in 2023 to 2024 (HMRC, 30 July 2026).
• 10,400 UK estates claimed the inheritance tax charity exemption in 2023 to 2024 (HMRC, 30 July 2026).
• The cost of IHT relief on charitable donations reached £1.28 billion in the year to April 2026, up 6% (HMRC, 1 July 2026).
• Fewer than 1 in 20 UK deaths, 4.72%, led to an inheritance tax charge in 2023 to 2024 (HMRC, 30 July 2026).
• UK legacy income was an estimated £4.4 billion in 2025 (Legacy Giving Report 2026).
• An estimated 104,000 charitable bequests were made in 2025, down 11% on 2024 as the probate backlog cleared (Legacy Giving Report 2026).
• The reduced 36% rate has applied to qualifying estates since deaths on or after 6 April 2012 (HMRC, Inheritance Tax Manual IHTM45001).

Data limitations

HMRC inheritance tax charity figures for recent years are uncertain because a few large estates move the totals. Legacy-market figures are probate-based estimates and are revised. The 2024 bequest count is inflated by backlog clearance and is not comparable with 2025. Forecasts are projections. HMRC does not, in its latest release, publish a separately verifiable count of estates using the 36% reduced rate, so no such figure is quoted here.

Recommended dataset fields

For a downloadable dataset: reference period; geography (UK or England and Wales); metric name; value; unit; source organisation; publication date; whether official statistic or estimate; year-on-year change; notes on comparability.

Press summary (about 150 words)

Charitable giving at death in the UK splits into two pictures. HMRC records the wealthier tail: £1.94 billion of charitable transfers were exempted from inheritance tax in 2023 to 2024, across 10,400 estates, and the cost of that relief reached £1.28 billion in the year to April 2026. Yet fewer than 1 in 20 deaths, 4.72%, incur inheritance tax at all. The wider legacy market, measured by Smee & Ford and Legacy Futures, was worth an estimated £4.4 billion in 2025 from about 104,000 bequests, most from estates below the tax threshold. The reduced 36% inheritance tax rate, available since 2012 to estates leaving 10% or more to charity, therefore bites for only a minority of charitable estates. With thresholds frozen to 2030 to 2031 and receipts forecast at £8.7 billion in 2025 to 2026, that minority is set to grow. All figures dated July 2026.

Five suggested headlines

• Charitable legacies exempted £1.94bn from inheritance tax, but reach fewer than 11,000 estates
• The 36% rate at 12: how a 2012 rule quietly reshaped charitable wills
• £4.4bn and rising: the legacy market most of the tax data never sees
• Why fewer than 1 in 20 estates ever meets the 10% charity test
• Frozen thresholds are pulling more estates into the 36% question

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