A Boost to Charity! Who thought Giving could be so Good!
If you have always thought that giving away money to charity in your Will is a good idea. Now there is an added incentive.
Up to now any gift you made in your Will to a registered charity was “exempt” from Inheritance Tax. This meant that any money given to charity through your Will was “taken out” of the equation when calculating the tax due on your Estate assets.
The charity would get their entitlement tax free. If any Inheritance Tax was due this would be bourne by the percentage of your Estate that was to go to “non-exempt” beneficiaries (for example your children).
Now following the 2011 Budget if you give 10% or more of your Estate to charity, the tax that is due on your Estate will be 36% (down from the usual 40%). In other words your Estate’s tax bill will be reduced!
Whilst it is not clear at this time what the finer details will be, and when the changes to the Inheritance Tax Forms will come in. There is now a clear incentive for you to leave a percentage of your Estate to charity. Such a gift will of course benefit charity, but more importantly will mean your family receives more.
To ensure that you come within the new rules, your current Wills should be reviewed. With more going to your family, and more to charity this is a win win situation!