Inheritance Tax and gifting to charity
27th April 2012
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Inheritance Tax and gifting to charity



Each individual in the UK currently has a Nil Rate Band Allowance of £325,000. This means on death you are entitled to gift £325,000 free of inheritance tax. If your estate were to exceed this at the date of your death then inheritance tax would be payable at 40% on anything above £325,000.


In the recent budget there have been no changes in the Nil Rate Band threshold and it is now set to remain until the 2014-15 tax year.


Spouses and civil partners are still able to transfer their Nil Rate Band threshold to the surviving partner for use on the second death, therefore being able to gift up to £650,000 free of inheritance tax.


The Government did announce a change in the recent budget in which individuals can reduce the inheritance tax rate from 40% to 36% by making gifts to charity.


Gifts to charity are not subject to inheritance tax. If your estate is taxable, any individual who includes a charitable legacy in their Will of at least 10% of their net taxable estate will benefit from a 36% rate of inheritance tax.


If an individual dies now gifting between 4-9% of their net taxable estate to charity then it is advisable that the family enter into a deed of variation to increase the percentage to 10%. HMRC will pay the whole increase in the gift and the remainder of the estate will benefit from the 36% tax.


At the Head Partnership our personal affairs department will be able to discuss inheritance tax, charitable gifts and the effect on your estate and including provisions within your Will.


For more information or to book an appointment please contact:-



Henley office:Melissa Reeds or Katherine Beaumont on 01491 570900 or


About the Author

Gill and Phil C

Member since: 9th July 2012

Hi, We are Phil and Gill Chappell. We own the Best of Henley-on-Thames. We live in Henley so would love to hear your views and opinions about all things Henley.

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