Best Family Law Practitioners in Chelmsford

Charitable Gifting and the Burden of Inheritance Tax Leaving a charitable gift under the terms of a Will is one way to not only reduce your Inheritance Tax (IHT) but also help good causes. Any gift left to charity is exempt from IHT with IHT charged on the value of the estate after charitable donations. Furthermore, where 10% or more of the net value of an estate is left to charity, the rate of IHT charged on an estate, exceeding the available allowances, falls from 40% to 36%. However, the rules are complex where an estate is left to charities (exempt for IHT purposes) and family members/friends etc (non-exempt for IHT purposes). An incorrectly drafted Will could mean the charities receive less than intended which could result in a claim by them. Example: By the terms of the Will, the deceased leaves half of his residuary estate to charity and the remaining half divided between friends. Half of the estate (£500,000) is taxable for IHT purposes. The reduced rate of tax is payable so 36% of £500,000 = £180,000. Where does the burden of the Inheritance Tax fall? CLICK BELOW TO READ THE FULL ARTICLE...