Under the new proposals the usual 40% rate of inheritance tax would fall to 36% when a deceased gives 10% or more of their estate to charity.  This 10% gift to charity would be based on the value of the estate after any relevant exemptions and reliefs have been deducted.  We should shortly know whether this is to be adopted – if the proposals are adopted it is expected that these changes would apply to deaths on or after 6^th April 2012.

Daniele Marks, Partner at Chambers Fletcher said of the proposals “it will be even more important to take appropriate legal advice before making a will and ensure that you have a valid will if these proposals become law as through the use of this there is the potential to pay less IHT and in addition the proposals would hopefully also encourage more charitable giving - it should be a win win!!”. 

UK Treasury have introduced plans to reduce inheritance tax (IHT) on an estate where at least 10% is gifted to charity.