Charitable gift by discretionary trust

[cliffordpope]

What would be the tax implications of a discretionary trust making a charitable gift on a beneficiary's behalf, rather than the beneficiary making the gift personally?
Would there be any advantages?
Would it make any difference if this were out of capital if there was insufficient income to cover the gift?
(Assuming of course that the trust had the powers to make the gift)

[maths]

Is the charity among the class of discretionary income beneficiaries?

[cliffordpope]

Not this charity specifically, but the trustees are empowered to make charitable donations in general at their discretion.

[maths]

The trustees of the discretionary trust are subject to income tax at 45% (38.1% on dividend income); ignoring the first £1,000 of trust income.I assume a sufficient tax pool.

On a payment to the charity out of trust income of say 55 an attaching tax credit 45% applies. As a charity is exempt it will be able to reclaim the 45% producing gross income of 100.

If the trustees make a distribution of income to an individual again a 45% tax credit attaches and the individual is exposed to his/her marginal rate on the income less the 45% tax credit (reclaimable if appropriate). A 45% taxpayer will thus be left with the distribution eg 55 distribution from trust leaves taxpayer with the 55. On paying the charity the 55 the charity is able to reclaim [[55/0.8] x 20%] ie 13.75. Thus gross income to charity 68.75.

Perhaps others more experienced in computations (and familiar with charities) could comment on my calculations.

[cliffordpope]

Thanks maths. I think I understand the way the payments out of income works - it was the implications of a capital payment I am at sea over.
I think I understand that such a payment would normally be subject to an IHT charge (?) but wonder whether this still applies to a charitable donation?

[maths]

Apologies if i misunderstood your query.

No exit charge for IHT applies where property leaves a relevant property settlement which is then held for charitable purposes (IHTA 1984 s76).v

[cliffordpope]

Many thanks for that maths. I was hoping that might apply, but nervous I might have misunderstood it.