Charities have welcomed changes to inheritance tax in George Osborne's Budget which will make it more cost effective for people to make bequests to them.

Mr Osborne on Wednesday ann-ounced a 10 per cent reduction to the inheritance tax rate payable for those leaving 10 per cent or more to charity.

Jewish Care chief executive Simon Morris applauded the move, "which we hope will encourage those making a will to consider a gift to charity, as currently only 16 per cent of wills in the community contain a charitable legacy".

Harvey Bratt, director of KKL, which offers free will drafting and estate planning in return for a JNF legacy, saw it as a "bold" departure.

"It is a win-win situation. It means that not only do good causes benefit - individuals will be able to leave more to their loved ones."

Chancellor had made ‘a conscious effort to support giving’

Philip Bunt, Norwood's Director of Corporate Services said: "The relief is designed so that the benefit of the tax saving is reflected in the bequests received by charities and not in payments to other beneficiaries."

But he added: "The remaining measures in this budget are likely to have a marginal effect on Norwood, although previous measures will increase our tax bill by £350,000 per year from this April."

Leeds Jewish Welfare Board chief executive Rebecca Weinberg perceived "a conscious effort to support charitable giving. However, this must be seen against the backdrop of cuts that are hitting the sector. Whilst this is a sweetener, there is a long way to go before the current air of vulnerability that pervades the sector is diluted."

And at south London's Nightingale home, chief executive Leon Smith cautioned that the bequests incentive should not dissuade supporters from making regular donations, "as we face reductions in local authority funding. We, like many other communal charities, are dependent on legacy giving. But they are unpredictable. People are living longer and need the money to pay for their care."

Mr Smith also welcomed Budget changes to Gift Aid, allowing charities to claim it on up to £5,000 of small donations without the need for lengthy form-filling.