Legacy changes in April’s budget
It came as no surprise in the Budget that, as previously announced, for deaths on or after 6th April 2012 a lower rate of Inheritance Tax of 36% will apply where 10% or more of a person's net estate is left to charity.
The new rules on charitable legacies mean you could reduce the Inheritance Tax bill on your estate by 10% from 6th April 2012. However, it is most unlikely that your existing Will is structured to make the most of this change. If your Will leaves assets to charity or you wish to leave part of your estate to charity now would be a good time to review the Will. HM Revenue & Customs recognise that the take up of this relief depends on the extent to which it is promoted by both professional advisers and charities.
Wards' Wills and Probate Team are geared up to draft Wills which take advantage of the new rules. Many of the Team are members of the Society for Trust and Estate Practitioners (STEP). STEP had a consultation and have published a draft clause for Wills in response to the legislation.
The individual exemption for Inheritance Tax will be frozen at £325,000 until April 2015. Assets in a deceased person's estate in excess of this level are taxable at 40%. Come April 2015 the individual exemption, known as the nil rate band, will rise in line with the Consumer Prices Index.
Inheritance Tax planning opportunities still exist when making or reviewing Wills. If there are agricultural business assets within your estate or if you are a widow or a widower and have re-married then valuable exemptions may apply.
If you would like to talk to a member of Wards' Team regarding your Will and Inheritance Tax planning please contact Jenny Pierce on 0117 943 4814 or by email to firstname.lastname@example.org in the first instance. Wards offer a free Will review service and there is no charge for any initial appointment.