3 July 2017

Charity Giving Can Help Your Family

I have mentioned before the financial planning benefits of charitable giving, and the Gift Aid system is fairly well known. That's where a gift to a registered charity can result in the basic rate tax you have already paid on that money being reclaimed by the charity. Higher rate tax can be reclaimed by you.

But let's focus on a different area - leaving to charities in your will. The Inheritance Tax (IHT) regime has some very useful incentives to do that, not only exempting gifts from IHT (normally 40%), but also reducing the tax rate for the whole of your estate down to 36% if you give at least 10% of your estate to charity.

If you were thinking of making such a legacy, then it could pay not only the charity but also your family to ensure that you reach the 10% threshold.

No-one is going to advocate giving to a charity if you don't support what the charity does. But if you do, then your support can help your family as well as the charity.

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