Friday, March 25, 2011
England currently has a 40% inheritance tax (IHT) on all estates above £325,000. The chancellor recently announced plans to lower the IHT on estates beginning in April 2012 to 36% if at least 10% of the estate is left to charity.
Donors now face the issue of whether to wait to make all charitable donations at death or to benefit from Gift Aid on lifetime donations. Figures calculated by KPMG show that higher-rate taxpayers may benefit more from leaving lump sums to charities at death rather than pay it in installments over a 10-year period. However, charities would benefit more from lifetime gifts.
Richard Proctor, a tax partner at Grant Thornton, says that this is “good news for family solicitors and will writers” because “[p]eople will need to rewrite their wills.”
Alice Ross, Estates that Donate Attract Lower IHT, FT.com, Mar. 23, 2011.
Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.