New relief in the Budget
The Chancellor outlined a new relief from Inheritance Tax in the Budget last Wednesday.
As you probably know bequests or gifts to Charities already fall outside the Inheritance Tax net. The new relief is to be given to those persons who bequeath 10% or more of their gross estate to Charity. The relief is to reduce the rate of Inheritance Tax payable on such estates by 10% . Instead of the present 40% rate the revised rate will become 36%. The relief will take effect from April 2012.
Obviously the size of such estates will have to be over the existing tax free limit of £325000 per person (or £650000 where spouse relief has been claimed).
It may well be worth reviewing existing Wills to see if a new Will has to be written to take advantage of this relief. In many cases perhaps a Codicil may suffice if only an additional bequest to charity is to be made.
Once again the importance of Will writing is emphasised. Get it right to preserve your assets and reduce the tax burden or get it wrong and penalise your beneficiaries and loved ones.
Also make sure your Executors are aware of the relief for probate purposes.