Leaving a gift in your will can change the amount of inheritance tax paid. For an unmarried person in the UK, the basic inheritance tax threshold (‘nil rate band’) is currently £325,000. Generally speaking, any part of your estate left above this threshold is taxed at 40%. However, leaving a bequest to charity can help to reduce your inheritance tax bill as follows:
- legacies to charity are exempt from inheritance tax; and
- additionally, if you leave charitable bequests of at least 10% of the ‘chargeable’ part of your estate (i.e. the excess above £325,000), then the rate of inheritance tax applied to the rest of your estate will be reduced from 40% to 36%.
Your solicitor will be able to give you more information on this. More information regarding inheritance tax’ thresholds, rules, and allowances can be found on the Government’s website.
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How to leave a legacy
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To talk about leaving a legacy to the Traverse, please get in touch with Head of Development, James Pierce - firstname.lastname@example.org