By Nadine Abrahams MIPW, Nadine Abrahams Professional Will Services
Making a Will is first and foremost about looking after the people you love. But it can also be an opportunity to leave something behind for the community and causes that matter to you.
Gifts left to qualifying charities are generally exempt from inheritance tax (IHT). And where at least 10% of the relevant part of an estate is left to charity, the rate of IHT on that part of the estate can reduce from 40% to 36%.
The difference can be surprisingly significant.
A simple example
Without a charitable gift
£1m taxable estate
IHT at 40%: £400,000
Beneficiaries receive: £600,000
With a £100,000 gift to Cheshire Community Foundation
£1m taxable estate
Gift: £100,000
Remaining taxable estate: £900,000
IHT at 36%: £324,000
Beneficiaries receive: £576,000
So, in this simplified example, the Community Foundation receives a £100,000 legacy, while the beneficiaries receive only £24,000 less.
Why Cheshire Community Foundation?
Leaving a gift to Cheshire Community Foundation is a way of giving something back to the communities in which we live and work.
They use their local knowledge to support voluntary and community organisations across Cheshire and Warrington. That means your legacy can continue making a difference long into the future, as the needs of our communities change.
A legacy doesn't need to be enormous. It might be a fixed amount or simply a percentage of what remains after you have looked after family and friends.
With thoughtful estate planning, it is possible to provide for the people you love, potentially reduce inheritance tax and leave a lasting legacy to your local community.
The example above is for illustration only. The inheritance tax rules surrounding charitable gifts, including the 10% test, can be complex and individual circumstances vary. Appropriate professional advice should always be taken.
Nadine Abrahams MIPW
Nadine Abrahams Professional Will Services
