Chancellor George Osborne’s plan, unveiled yesterday, would limit total deductions for all tax breaks, including those on donations, to about $79,000 for higher-rate taxpayers beginning April 2013.
Nonprofit industry groups said the cap would deter big-ticket gifts by millionaires. According to the National Council for Voluntary Organizations, half of all U.K. gifts come from 8 percent of donors.
The government said its aim is to “ensure that those on higher incomes cannot use income tax relief excessively.” But John Low, CEO of the Charities Aid Foundation, said tax breaks on large gifts “is not tax avoidance. It is supporting major donations by people who in some cases are donating the proceeds of a lifetime’s work to charity.”