With inheritance tax back in the spotlight, Sarah Curzon, director at MHA Broomfield Alexander, explores the figures behind it and why there are calls for a step-change in the way it’s levied. (more…)
Inheritance tax comes under the microscope
10% reduction in IHT rates…
Leighton Reed, Director, MHA Broomfield Alexander
If you leave at least 10% of your net estate to a recognised charity this may reduce the amount of Inheritance Tax paid by your estate to 36% instead of 40%.
The following notes explain some of the factors that need to be taken into account.
- The net value of your estate is the value of your taxable assets less qualifying debts, exemptions, nil-rate band and any other reliefs or liabilities.
- A qualifying charity is one recognised by HMRC that has been granted a charity reference number.
If by chance your IHT planning does not qualify your estate for the 10% rate reduction, your beneficiaries can arrange an instrument of variation to increase charitable donation to an appropriate level.
Needless to say the rules are complicated in all but the simplest circumstances so do talk to us if you want to introduce this feature into your estate planning.
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