U.K. Chancellor Might Backpedal on Charitable-Deduction Cap

Britain’s top Treasury official is considering alternatives to his controversial proposal to set a limit on tax deductions for high earners, which has charities and philanthropists have blasted as a deterrent to big donations, says the Financial Times.

Chancellor George Osborne’s plan to cap total annual tax relief at $80,000 or 25 percent of the payer’s income, whichever is higher, has also drawn heavy fire from prominent members of his Conservative Party, including some top Tory fundraisers.

Citing sources close to the chancellor, the Times says Mr. Osborne is considering two alternative plans: raising the limit on tax breaks to 50 percent of a payer’s income, or letting donors roll charity deductions they are unable to claim into future years. But he is reportedly standing firm against calls to exempt donations completely from the cap.

With the controversy heating up, the government has released data showing that more than 1,000 Britons who earn above $1.6-million—putting them in a 50-percent tax bracket—pay less than 30 percent. “We’re capping [social] benefits and these figures clearly show why it’s fair to cap tax reliefs for the wealthy as well,” a Treasury spokesman said.