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MIKE TRUMAN looks at complexities created for inheritance tax when 10% of an estate is left to charity
KEY POINTS
- Lower rate of IHT if 10% of amount chargeable is given to charity on death.
- ‘Charitable giving condition’ requires calculation of ‘baseline amount’.
- Calculate for three separate ‘components’ but can merge by election.
- Difficulty of drafting an acceptable clause in the will which will meet requirements.
Ask most people what the biggest tax change for charities was this year and if they answer at all they will probably pick the much-publicised ‘charity tax’ limiting certain deductions from income (including charitable donations) to £50 000 or 25% of income whichever is the greater.
In fact this was never intended to come in until next year and excluding charitable donations was one of the first U-turns announced as the omnishambolic edifice of the Budget started to cave...
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