Reduced rate of IHT for estates leaving gifts to charity

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

Gifts to charity benefit from full exemption from inheritance tax. See the Exempt transfers for IHT guidance note.

Where the disposition of a deceased estate includes a gift to charity, part or all of the remaining taxable estate will benefit from a reduced rate of inheritance tax, if the required conditions are met. The rate is reduced from 40% to 36% on the qualifying portion of the estate.

This relief applies where the death occurs on or after 6 April 2012.

Conditions for the reduced rate

The reduced rate applies to the non-exempt part of one or more components of the estate if gifts to charity make up 10% or more of a baseline amount of the components in question. The baseline amount is the value of the component, including the charitable gift, but after the deduction of liabilities, IHT reliefs, other exemptions, and the nil rate band.

The mechanics of the valuation are described below.

The estate is divided into components as follows:

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Owner-Managed Businesses

Allowable expenses for property businesses

Allowable expenses for property businessesGeneral itemsMany of the principles applying to allowable expenses for property businesses are similar to those that apply for trading and the rules for individuals in a property business are generally the same as for companies with some exceptions which are

14 Jul 2020 13:26 | Produced by Tolley in association with Rob Durrant-Walker of Crane Dale Tax, part of AMS Group Read more

Tax Returns

Corporation Tax

Overseas property businesses for companies

Overseas property businesses for companiesOverviewReal estate income is generally taxed where the property is located; the UK tax treaties generally allow the jurisdiction where the land is located to tax income from the land.Therefore, a UK company with overseas property may be subject to tax in

14 Jul 2020 12:22 | Produced by Tolley in association with Rob Durrant-Walker of Crane Dale Tax, part of AMS Group Read more

Value Added Tax

VAT registration ― artificial separation of business activities (disaggregation)

VAT registration ― artificial separation of business activities (disaggregation)This guidance note should be read in conjunction with the VAT registration ― compulsory guidance note and is relevant to persons established or resident in the UK. Persons that are not established or resident in the UK

14 Jul 2020 13:57 | Produced by Tolley Read more

��Ӱ��