New IHT relief offers tax planning opportunities

Under Government proposals announced in March's Budget, the current 40% rate of Inheritance Tax (IHT) is to be reduced to 36%.

The reduced rate applies where death occurs on or after 6th April 2012 and at least 10% of the value of the net estate has been left to a registered charity.

Chris Butcher, a partner at Michelmores Solicitors and a specialist in probate and estates administration explained:

"After taking away the nil-rate band of £325,000 plus spouse/civil partner exemption and other inheritance reliefs such as business and agricultural property), IHT is payable on the remaining amount.  Provided 10% or more of the net estate, after exemptions and reliefs, is being left to charity, 

"Lifetime gifts to charity are unaffected by the new proposals.

"It is worth remembering that the £325,00 nil rate band is in place until April 2015 which offers an opportunity for some positive tax planning as charitable legacies can be  incorporated into will straightway."

For further information contact: Chris Butcher - chris.butcher@michelmores.com