As part of David Cameron’s ‘Big Society’ the government has reduced the rate of Inheritance Tax (IHT) from April this year, in a bid to encourage more people to include a gift to charity in their Will.
Lee Young heads our Wills and Tax Team and he is a Chartered Tax Advisor as well as a Solicitor. He explains “Inheritance Tax is due on estates valued over the current threshold of £325,000 (2011-2012). Married couples and civil partners can increase this threshold when the second partner dies to £650,000. The tax payable is 40% on any amount over this threshold and including a gift to charity of 10% or more of your estate will reduce this to 36%. The value of the gift will be deducted from the estate before the tax is calculated.”
Gift aid will also be simplified so that charities can keep on-line records of donor’s details. The Chancellor has also said that a new scheme would allow Gift Aid to be claimed on small donations without the need for form filling, up to a limit of £5,000 per charity per year.
Charities have welcomed the Chancellor’s announcement saying it would be a welcome boost in financially challenging times.
If you have any queries about planning your estate or revising your Will please call 01202 499255 and Lee or a member of his team will be happy to discuss any questions you may have.