The Treasury Secretary stated back in April this year that the proposed reduced Inheritance Tax rate for charitable testators was “the most radical reform to charitable giving for more than 20 years”
The Treasury have now revealed more information on how this will work in practice by publishing their consultation document.
To qualify for the 36 per cent rate of Inheritance Tax the bequest will have to exceed 10 per cent of the net taxable estate, after deducting the nil rate band and the value of property passing to spouse.
The scope of the consultation document is to then examine other areas specifically like: the effect of jointly owned property, effects of Deeds of Variation to charities, the nature of the legacies and administrative issues regarding the forms to be completed to claim the reduced rate and guidance for Wills etc.
The consultation closes on 31 August 2011 and will form the basis for the draft legislation.
The plan is for the reduced rate to apply to deaths on or after 6 April 2012.
This should represent good news for testators and charities to have some clarification of how the reduced rate will apply, and it should also provide a useful marketing tool for charities.
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