23 December 2011

Pay Less Inheritance Tax!

The majority of us give to charities during our lifetime. But only around 7% include charities in our wills.

From April 2012 there is an added incentive to do that, particularly if you will have an Inheritance Tax (IHT) bill to pay. That's because if you give at least 10% of your estate* to charity, the IHT tax rate will be reduced from 40% down to 36%.

Practically speaking, your will can be worded to refer to a percentage (10% or more) to ensure that it meets the threshold. You could reserve a suitable sum of money with a whole of life assurance policy, or another investment (possibly written in trust) or simply leave the money to be found from your assets.

* 10% of the "net" estate after deducting nil rate band, etc.

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