Inheritance Tax Act 1984 section 23

Gifts to charities or registered clubs

Section 23 provides an unlimited inheritance tax exemption for transfers of value to the extent that the value transferred is attributable to property given to charities or registered community amateur sports clubs, subject to a number of anti-avoidance conditions.

• Transfers of value attributable to property given to charities or registered community amateur sports clubs are exempt from inheritance tax, with no monetary limit, for both lifetime and death transfers.
• The exemption is denied where the gift takes effect only after a prior interest ends, depends on a condition not met within twelve months, or can be reversed (defeasible), unless it has not been defeated and is no longer defeasible twelve months after the transfer.
• The exemption is also denied where the donor retains a benefit — for example, where land is given but the donor, their spouse or civil partner, or a connected person can occupy it rent-free or below market rent, or where non-land property is given subject to a reserved interest unless that interest was created for full consideration or does not substantially affect the recipient's enjoyment.
• The exemption does not apply if the property, or any part of it, may become applicable for purposes other than charitable purposes, the purposes of a registered club, the purposes of a governing body of an eligible sport, or the purposes of bodies qualifying under sections 24, 24A or 25 of the Act.