BLB Solicitors
  • +01225 755656
  • enquiries@blbsolicitors.co.uk
BLB Solicitors
  • +01225 755656
  • enquiries@blbsolicitors.co.uk
  • Home
  • Services for You
    • Conveyancing Solicitors
    • Leasehold Solicitors
    • Property Dispute Solicitors
    • Divorce, Family Law and Mediation
    • Lifetime Planning and Wills
    • Probate and Estate Administration
    • Equity Release Solicitors
    • Retirement Property Conveyancing
    • Personal Injury Compensation
    • Medical Negligence Solicitors
  • Services for Business
    • Commercial Property
    • Commercial Property Disputes
    • Corporate & Commercial Legal Advice
    • Estate Management Solicitors
  • BLB Solicitors Locations
    • Almondsbury Solicitors
    • Bath Solicitors
    • Bristol Solicitors
    • Bradford on Avon Solicitors
    • Swindon Solicitors
    • Trowbridge Solicitors
  • About Us
    • Our Team
    • Working for BLB
    • BLB Solicitors – How we work
    • Making Payments to BLB Solicitors
    • Instructing BLB Solicitors
    • Terms of Business
    • Complaints Policy
    • Interest Policy
  • Blog
  • Contact Us

Home » Charitable gifts and Inheritance Tax

Lifetime Planning and Wills
Hands open to reveal the word give
Jan 14th, 2021

At BLB Solicitors, our goal is simple – to deliver you clear, practical legal advice and cost-effective solutions. We hope you enjoy exploring our Blog. If you can’t find what you’re looking for, please do contact us.

Charitable gifts and Inheritance Tax

Lifetime Planning and Wills expert Jenny Greenland considers how giving to charity can reduce the amount of Inheritance Tax paid by your estate.

Our Lifetime Planning and Wills team are available on 01225 755656 or by completing the Contact Form below.

Clients often instruct us to include gifts to charity in their Will, typically to an organisation with whom they have an affinity or personal connection. But charitable giving has another advantage. Gifts of money or physical assets to charity, whether made during your lifetime or in your Will, are exempt from Inheritance Tax (IHT). This is the government’s way of encouraging more people to give or leave money to charity.

Inheritance Tax

And if you are inclined to be particularly generous to charity, there is a further incentive. For people dying after 5th April 2012, who leave 10% or more of their net estate to charity, the rate of IHT is reduced from 40% to 36%. In some instances, this can save the estate many thousands of pounds.

Baseline amount

In deciding whether the estate will benefit from a reduced rate of IHT, the total amount left to charity is compared to a ‘baseline amount’. The ‘baseline’ for this purpose will be the value of the estate charged to IHT after deducting all available reliefs and exemptions and the nil-rate band, but excluding charitable legacies. To qualify for the lower rate of IHT, the total left to charity must amount to 10% or more of the baseline.

In terms of estate planning, this calls for very careful drafting of the Will.

Deed of Variation

If a beneficiary named in the Will chooses to pass on their legacy to charity, it is worth considering giving effect to that transfer as a Deed of Variation. This is a document that allows the beneficiaries in a Will, by agreement, to change the distribution of the estate. If a Deed of Variation is executed within two years of the date of death, the gift to charity by the beneficiary is treated as if it had been made by the deceased person. As such, the estate can benefit from the charitable exemption.

Jenny Greenland
Request a Call Back

Recent Articles

  • The danger of using AI to update Wills
  • What happens to pets when you die?
  • Letter of Wishes: do I need one?
  • Families urged to act now and plan ahead for upcoming changes to Inheritance Tax
  • Leaving money to charity in your Will

Newsletter Sign-up

* indicates required

Share this article

You may also like...
  • Jan 14th, 2025
    Can a parent disinherit a child?
    Read Article
  • Feb 5th, 2025
    Families urged to act now and plan ahead for upcoming changes to Inheritance Tax
    Read Article
View All Related Articles
Get in-touch today
Contact Form

Left Column

Right Column

Centre

 
Sending
  • Bristol Solicitors

    0117 905 5308
  • Bath Solicitors

    01225 462871
  • Bradford on Avon Solicitors

    01225 866541
  • Swindon Solicitors

    01793 615011
  • Trowbridge Solicitors

    01225 755656
  • Almondsbury Solicitors

    0117 905 5308
Authorised & Regulated by Solicitors Regulation Authority (No. 636644)
©2025 BLB Solicitors | Terms | Privacy | Legal