HB Accountants

June

New way to save Inheritance Tax

Save inheritance tax (IHT) with a legacy

If you would like to benefit a charity when you die but don't want to deprive your family of too much money you may be interested in the new relief proposed in the latest Finance Bill.

If you give 10% or more of your estate to a charity when you die, the inheritance tax on the remaining estate is reduced from 40% to 36%.

As an example assume a gross estate of £1,325,000.  After the nil-rate band of £325,000 is excluded, the remaining £1,000,000 would be taxed at 40% giving an IHT charge of £400,000.

If you leave £100,000 to charity the taxable estate reduces to £900,000 but this is "only" taxed at 36% giving an IHT charge of £324,000.

You have therefore saved £76,000 of IHT by giving £100,000 to charity so your dependants are only worse off to the extent of £24,000.

If you would like to discuss this further please call us on 01992 444466 or e-mail us at directors@hbaccountants.co.uk.

back to top