Reduce Your Inheritance Tax Bill by Donating to Charity

I would hope there are other reasons why you would want to remember your favourite charity in your will. But one financial advantage of doing so is that your inheritance tax bill (IHT) will be reduced.

Assets bequeathed to a charity do not count towards the value of an estate, for IHT purposes. In addition, the tax rate may reduce from 40% to 36% if 10% of the estate is donated. And no tax will be due if the gift takes the value of the estate below the IHT threshold of £325,000.

To take advantage of this, the charity must be registered in the UK and have a HMRC charity number. Include the correct spelling of the charity’s name and its registered address in your will.

In 2014, UK charitable bequests in wills totalled £2.2 billion. Gifts can be money or your house or car or jewellery or other personal property. It’s a great way to continue your support after you have died.

Remember your charity in your will (and pay less tax) by contacting Heritage Will Writing on 02380 879243.