Gifting money to charity in your Will can reduce your inheritance tax (IHT) bill – and in some, albeit rare cases, get rid of it all together.
All charitable giving is tax free and gifts to UK charities are exempt from IHT.
So, when you include a charity in your Will, the amount you donate is not included in the total taxable value of your estate which is used to work out how much IHT is owed.
If you donate 10 per cent or more of your net estate to charity, it could qualify for the lower IHT rate of 36 per cent instead of the usual 40 per cent.
Brought in by the former Chancellor, George Osborne, in 2012, the idea was to make “giving 10 per cent of your legacy to charity the new norm”.
Sound too good to be true? Well, there are certainly some pros and cons….
Wards Solicitors’ specialist Wills, Probate and Mental Capacity solicitors can talk to you about estate planning and the best way to structure your Will to secure the lower IHT relief.
It’s also worth bearing in mind that if you inherit an estate and want to change, add to or increase the donations made to charity, you can do this with a deed of variation.
For help, advice and guidance on this area of the law contact Wards Solicitors’ Wills, Probate and Mental Capacity team by phone or pop into one of our 11 local offices.