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The UK's 36% reduced rate for estates leaving 10%+ to charity is one of the most powerful and underused inheritance tax planning tools
UK IHT is normally 40% on estates above the nil rate band. However, if 10% or more of the 'net estate' (after nil rate band and other exemptions but before charitable gifts) is left to qualifying charities, the entire taxable estate is taxed at 36% instead of 40%. For a £2m estate, the saving is approximately £13,500. More significantly, the charity bequest itself is also fully exempt from IHT. A carefully structured will leaving 10% to charity can therefore reduce the overall IHT bill while supporting causes the testator cares about. Many estates are close to the 10% threshold — a small adjustment to the will can unlock the reduced rate. Financial advisers rarely highlight this tool to clients.
Source: IHTA 1984 §7(2) — reduced rate; Schedule 1A — charitable legacy
Netherlands ANBI status is rigorously regulated — not all foreign charities qualify, creating risk for expats leaving Dutch assets to foreign charitable causes
In the Netherlands, only Algemeen Nut Beogende Instellingen (ANBIs) — organisations formally registered with the Belastingdienst as public benefit entities — receive full inheritance tax exemption for bequests. Foreign organisations that want ANBI status must apply to the Belastingdienst and meet Dutch criteria. Many well-known international charities (Oxfam, Red Cross international branches, etc.) have Dutch ANBI status, but not all. For a Dutch testator wanting to leave assets to a foreign charitable cause, verification of ANBI status is essential — a bequest to a non-ANBI foreign charity faces up to 40% inheritance tax. The Belastingdienst publishes a searchable ANBI register at anbi.belastingdienst.nl.
Source: Successiewet 1956 Art. 32 — ANBI vrijstelling; Belastingdienst ANBI register
France's assurance-vie is the most tax-efficient vehicle for charitable legacies for French residents — outside succession, with €152.500 per beneficiary exemption
French charitable organisations with public utility status (reconnues d'utilité publique) are fully exempt from succession tax. However, the most tax-efficient channel for a significant charitable legacy in France is assurance-vie: life insurance with the charity as named beneficiary passes outside the succession entirely and also outside the charitable exemption calculation. For premiums invested before age 70, there is no inheritance tax on the life insurance proceeds going to the charity — and they don't reduce the quotité disponible for forced-heirship purposes. This means a French resident can make a substantial charitable bequest without affecting children's réserve héréditaire rights, by using assurance-vie with the charity as named beneficiary.
Source: CGI Art. 796-0 quater (FRUP exemption); Art. 990-I (assurance-vie)
Charitable Bequest — Inheritance Tax Exemption by Country 2026
National tax authorities
📋 Reference Data
Charitable Bequest Tax Treatment — European Countries 2026
National tax authorities + CAF (Charities Aid Foundation) European Giving Report 2025
| Country | Inheritance Tax on Charity Bequests | Qualifying Organisations | Registration Required? | Additional Incentive | Notes |
|---|---|---|---|---|---|
| UK | Full IHT exemption | Registered charities (HMRC/Charity Commission) | Yes — charity must be registered | 36% reduced rate on rest of estate if 10%+ to charity | Most flexible incentive structure in Europe |
| Netherlands | Full erfbelasting exemption | ANBI-registered organisations | Yes — Belastingdienst ANBI register | Gift tax also exempt for ANBIs | Foreign ANBIs must apply for Dutch registration |
| Germany | Full Erbschaftsteuer exemption | Gemeinnützige Körperschaften (§13 Nr. 16 ErbStG) | Yes — must hold Freistellungsbescheid | Schenkungsteuer also exempt during lifetime | Wide range of qualifying organisations |
| France | Full succession tax exemption | FRUP + associations d'utilité publique + fondations | Yes — reconnaissance d'utilité publique | Assurance-vie with charity beneficiary even more efficient | CGI Art. 796-0 quater |
| Italy | Full imposta successioni exemption | ONLUS / ETS (Enti del Terzo Settore) | Yes — registered with Runts (National Third Sector Register) | Lifetime donations also deductible (26% income tax credit) | Riforma del Terzo Settore 2017 |
| Spain | Full ISD exemption | Fundaciones and asociaciones de utilidad pública | Yes — Ministry of Finance recognition | Similar exemption for donations during lifetime | Ley 49/2002 — mecenazgo |
| Belgium | Reduced rate — 6.6% (Brussels) or specific exemption | Recognised public utility organisations | Yes — Belgian registration required | Varies by region | Complex regional variation |
| Sweden | N/A — no inheritance tax since 2004 | N/A | N/A | 30% income tax deduction on lifetime donations | Sweden: no IHT means charity bequests are tax-neutral vs heirs |
| Switzerland | Full exemption (all cantons) | Gemeinnützige Stiftungen + registered charities | Yes — cantonal recognition | Lifetime donations deductible from income tax | Unanimous across all 26 cantons |
| Denmark | Reduced rate — 15% | Recognised charitable organisations | Yes | Generous lifetime deduction regime | Denmark: 15% for charity vs 15% standard rate — minor benefit |
| Norway | N/A — no inheritance tax since 2014 | N/A | N/A | 25% income tax deduction lifetime gifts | Norway abolished inheritance tax 2014 |
| Ireland | Full CAT exemption | Bodies established for charitable purposes | Yes — Charities Regulator registration | Irish charities can reclaim income tax on donations | Similar to UK structure |
| Austria | Partial exemptions | Gemeinnützige Körperschaften | Yes | Lifetime donations deductible (limited) | Austria: IHT abolished — no estate tax benefit |
ⓘ 'Full exemption' means the charitable bequest reduces the taxable estate by its full value — the charity pays no inheritance tax on what it receives. The UK's additional incentive (36% reduced rate) is unique in Europe — no other country reduces the rate on the remaining estate as a reward for charitable giving. Sweden, Norway, Austria, and Switzerland effectively have no inheritance tax, making charitable bequests tax-neutral versus family bequests in those jurisdictions.
UK Charitable Bequest — 36% Reduced Rate Calculation Example
HMRC — IHTA 1984 §7(2) + Schedule 1A
| Scenario | Estate Value | NRB Applied | Net Estate | To Charity (10%) | Taxable Remainder | IHT at 40% | IHT at 36% | Saving | Notes |
|---|---|---|---|---|---|---|---|---|---|
| Without charity | £1.500.000 | £325.000 | £1.175.000 | £0 | £1.175.000 | £470.000 | N/A | N/A | Standard 40% rate |
| With 10% to charity | £1.500.000 | £325.000 | £1.175.000 | £117.500 | £1.057.500 | N/A | £380.700 | £89.300 vs no charity | Charity gets £117.5k; heirs better off AND charity benefits |
| Compare — no charity | £1.500.000 | £325.000 | £1.175.000 | £0 | £1.175.000 | £470.000 | N/A | N/A | Heirs get £705.000 after IHT |
| Heirs get with charity | £1.500.000 | £325.000 | £1.175.000 | £117.500 | £1.057.500 | N/A | £380.700 | N/A | Heirs get £676.800 |
| Net cost of charity gift | — | — | — | £117.500 | — | — | — | Actual cost to heirs: £117.500 − £89.300 = £28.200 | Charity gets £117k for cost to heirs of only £28k |
ⓘ This is the key insight of the UK 36% reduced rate: a £117.500 charitable bequest costs the heirs only £28.200 in reduced inheritance (because the IHT saving is £89.300). The charity receives 4× more than the heirs 'pay' in reduced inheritance. This is one of the most efficient philanthropic vehicles in Europe. The 10% threshold calculation is precise — estates should be structured carefully to ensure they meet the 10% test.
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🔬 Methodology & Sources
Estate & Legacy Data
Data from official legislative sources, EU e-Justice portal, and specialist publications.
Formula
Jurisdiction-specific.
CitationEU Succession Regulation 650/2012; STEP Handbook 2025; national codes.
❓ Frequently Asked Questions
Yes — in two ways. First, any amount left to a registered UK charity is completely exempt from inheritance tax — it reduces the taxable estate by its full value. Second, if 10% or more of the 'net estate' (estate minus nil rate band and reliefs) is left to charity, the IHT rate on the entire remaining taxable estate drops from 40% to 36%. This means a £117,500 charitable bequest on a £1.5m estate saves the heirs £89,300 in IHT while the charity receives £117,500 — the charity gift costs heirs only £28,200. This is an extraordinary philanthropic leverage tool and significantly underused.
An ANBI (Algemeen Nut Beogende Instelling) is a Dutch public benefit organisation formally registered with the Belastingdienst. Bequests and donations to ANBIs are completely exempt from Dutch inheritance tax (erfbelasting) and gift tax (schenkbelasting). The Belastingdienst maintains a public searchable ANBI register. If you want to leave Dutch assets to a foreign charity, that organisation must hold Dutch ANBI recognition — otherwise the charity pays up to 40% inheritance tax on what it receives. Major international charities (Red Cross NL, Oxfam Novib, MSF Netherlands) typically have ANBI status. Always verify before drafting your will.
Yes — bequests to qualifying charitable organisations (gemeinnützige, mildtätige, or kirchliche Körperschaften) are fully exempt from German inheritance tax under ErbStG §13 Abs. 1 Nr. 16. The organisation must hold a current Freistellungsbescheid (tax exemption certificate) from the German tax authority confirming its charitable status. Foreign organisations do not automatically qualify — they must demonstrate to the German Finanzamt that they meet the German gemeinnützig criteria under AO §§ 52-55. For lifetime donations (Schenkungen), the same exemption applies for schenkungsteuer — and organisations can also issue donation receipts for income tax deduction.
For French residents, assurance-vie (life insurance) with the charity as named beneficiary is more tax-efficient than a will bequest for significant amounts. Reason: the charity receives the insurance proceeds outside the succession — no droits de succession apply, no réserve héréditaire issues, and the amount doesn't count against the quotité disponible. For premiums paid before age 70: zero inheritance tax, even above the €152.500 allowance that applies to non-charitable beneficiaries. A testamentary bequest to a FRUP (fondation reconnue d'utilité publique) is also fully exempt from succession tax — but assurance-vie is more flexible and avoids probate delay.
The UK is the most structured — it's the only European country that reduces the IHT rate on the entire taxable estate (from 40% to 36%) when 10%+ goes to charity, creating a powerful giving incentive beyond simple exemption. Netherlands, Germany, France, Italy, and Switzerland all provide full inheritance tax exemption but no additional rate reduction. Countries with no inheritance tax (Sweden since 2004, Norway since 2014, Switzerland at cantonal level for many cantons) have no inheritance tax incentive for charity — but provide strong lifetime donation income tax deductions. Ireland mirrors the UK structure closely and also provides full CAT exemption for charitable bequests.
Sources & References
Data sourced from official institutional publications. Results are for informational purposes only. Last reviewed Jan 2026.
Data Disclaimer
Estate and succession law is complex and jurisdiction-specific. Always consult qualified legal and tax advisers. This page is informational only.
Estate and succession law is complex and jurisdiction-specific. Always consult qualified legal and tax advisers. This page is informational only.