Charity Begins at Home

Would you like to be able to give a little more to charity under your Will, whilst leaving the same amount, if not more, to your children, family, friends and loved ones, and less to the Chancellor of the Exchequer?

Since 6 April 2012 in many cases you can.

In addition to the established principle that money/assets passing to registered charities under a Will are exempt from inheritance tax, since 6 April 2012 those leaving 10% or more of their chargeable estate to charity will benefit from inheritance tax being charged on the residue at 36% rather than the full 40%.

The charitable giving does not have to be substantial. The 10% is calculated on the ‘chargeable estate’ i.e. the sum over the tax threshold. If an Estate totals £350,000, on current thresholds you would only need to give a minimum of £2,500 to charity to qualify.

Compare the situation on an estate of a spinster valued at £500,000. If she gave £17,500 to charity rather than £15,000 not only would the charity be £2,500 better off, but her family would receive an additional £4,800 and her estate would bear £7,300 less inheritance tax.

The rules and calculations are complex and need to be looked at in the light of individual circumstances but this incentive is worth exploring for those who already have minimal charitable giving under their Wills or wish to prepare new Wills including sums to charity.