Dawn Joughin, of Canter Levin and Berg, on changes to Inheritance Tax
IN HIS last Budget, the Chancellor of the Exchequer, George Osborne, announced a 10% discount would be made on the current 40% rate of Inheritance Tax (IHT).
This was for individuals who leave at least a tenth of their estate to charity as part of a new drive to boost legacy giving to charities and the arts.
The reduction means an actual reduced tax rate of 36% overall and although it does not benefit the remaining beneficiaries of the estate, it does provide some opportunity to benefit charity, rather than Her Majesty's Revenue and Customs (HMRC).
Inheritance Tax is currently charged on estates worth more than £325,000 (the nil rate band, which was again frozen in the Budget).
IHT is also levied on assets transferred in the preceding seven years before death.
In the last year, IHT was paid on approximately 16,000 estates across the UK.
As a probate specialist, and in my role as a Trustee of Age UK Mid Mersey, I am aware of how much charities, and, in particular, local charities, rely on legacies to enable them to provide important services to the local community.
I would like to urge those members of the public with an estate that is liable to Inheritance Tax to make wills, or review their existing wills in the light of the Budget change, to see if they are able to leave a gift to a charity of their choice.
