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ARTICLE · 28 NOVEMBER 2011

Incentives For Charitable Legacies: New Precedent Clause From

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The Chancellor’s March 2011 Budget announced that a reduced rate of inheritance tax (IHT) will be introduced for those who donate 10% or more of their net estate to charity.

United KingdomTax
Alana Lowe-Petraske
Alana Lowe-Petraske
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The Chancellor's March 2011 Budget announced that a reduced rate of inheritance tax (IHT) will be introduced for those who donate 10% or more of their net estate to charity. HM Revenue and Customs held a consultation on the proposal which closed on 31 August 2011, and draft legislation for further consultation is expected early in December.

For deaths on or after 6 April 2012, it is now proposed that individuals who include charitable legacies in their will of at least 10% of their net taxable estate will benefit from a 36% rate of IHT, a 10% reduction from the usual IHT rate of 40%.
The purpose of this relief is to incentivise giving generally. It should be of particular interest for potential benefactors who are already considering leaving legacies and who may find under the proposed relief that they can leave more to charity without taking away from the amount left to their non-charitable beneficiaries.

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