World Kindness Day - 13th November 2021
World Kindness Day is a global day that promotes the importance of being kind to each other, to yourself, and to the world. The purpose of this day is to help everyone understand that compassion for others is what binds us all together. The day encourages good deeds and acts as a reminder that every kind act, even small ones, creates a ripple effect that makes a difference on an individual and global level.
With World Kindness Day in mind, I am looking at gifts to charities. All gifts to a charity are exempt from Inheritance Tax (IHT), regardless of the amount of the gift. Many people provide for their favourite charity in their Will. The amount given to the charity will be deducted from the calculation of the deceased’s person’s chargeable estate thereby reducing the amount of the estate which is subject to IHT. If the whole estate is left to charity, there would be no IHT to pay.
Charitable gifts in a Will can also reduce the amount of IHT that the rest of an estate will pay. In general terms, if the person leaves at least 10% of their net estate to charity, the rate of IHT chargeable on the remainder of the estate which is subject to IHT is reduced from 40% to 36% on some or all of the estate. With careful planning, you could therefore ensure that your chosen charity and taxable beneficiaries receive more.
If you would like any advice on Inheritance Tax and leaving gifts in your Will, please do not hesitate to contact Peter Brown on 01992 422128 and he would be happy to assist you.