Rates of tax remain unchanged at 40% (death transfers) and 20% (lifetime chargeable transfers). The nil rate band of £325,000 is frozen until 2015.
From 6 April 2012, where a person leaves 10% of their net estate to charity in their will, the rate of IHT on the remainder will be reduced from 40% to 36%. For example, on a £1m estate all left to children, IHT is 40% of £675,000 (£270,000), and the beneficiaries receive £730,000. If £100,000 is left to charity after 6 April, the IHT on the £900,000 balance will be 36% of £575,000 (£207,000) and the beneficiaries will receive £693,000. The charity will receive £100,000 but the beneficiaries will only get £37,000 less.
|If you are planning to give to charity in your will, consider making it 10%|