From April 2012, where an individual leaves at least 10% of their net estate to charitable bodies then the inheritance tax rate will be reduced from 40% to 36%.
Deciding to include such a bequest to charities means that you will be able to assist charities with their work and less inheritance tax would be paid on your estate, although if this also reduces the proportion of the estate left to your family and friends the overall effect may be of little benefit to them personally.
Under the current rules inheritance tax is only payable on estates over £325,000, subject to certain reliefs and exemptions which may apply. The new provisions will be available for estates where the testator dies after 6 April 2012.
Charities have welcomed the change hoping that it will give a needed boost to their funding at a difficult time.
If you would like to discuss the new provisions or estate planning in general or wish to review your will please contact Sarah Goodwin in our Wills team on 0161 475 7689.
