Will the changes in the Budget reduce my Inheritance Tax bill?
Will the changes in the 2011 Budget reduce my Inheritance Tax bill? The short answer is yes if you are prepared to give 10% of your estate to charity. The change, announced in the Budget on 23rd March 2011, comes into effect in April 2012: the tax rate on the remainder of the estate will reduce from 40% to 36%. It is designed to try to encourage more people to leave a charitable legacy when they die. It has been calculated that the change will cost the Treasury in the region of £170 million a year by 2015/16 but it will be worth about two and a half times that to charities. Family members or other beneficiaries receiving the remainder of the estate under the terms of the Will will not be better off but then neither will the taxman! The rules governing the taxation of an estate are not straightforward, particularly for the owner of a business or a farm; specialist advice should always be taken. Contact Belinda Butler-Smith (bbutler-smith@callaghans.co.uk) or Sophie Andrews (sandrews@callaghans.co.uk) for further advice.
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