All gifts made to qualifying political parties are exempt from Inheritance Tax. Under the current rules, a political party qualifies for exemption if, at the last general election (ie. ignoring by-elections) preceding the gift:
- Two members of that party were elected to the House of Commons or
- One member of that party was elected to the House of Commons and not less than 150,000 votes were given to candidates who were members of that party.
From Royal Assent of the Finance Bill 2017/18, inheritance tax relief for donations to political parties will be extended to parties with representatives in the devolved legislatures, as well as parties that have acquired representatives through by-elections.
This will ensure consistent and fair treatment for all national political parties with elected representatives.