Inheritance Tax

Inheritance Tax is the tax payable on your estate when you die, if the value of your estate exceeds a certain amount. All donations to Henshaws Society for Blind People are free from Inheritance Tax.

Inheritance Tax

At its simplest, Inheritance Tax is the tax payable on your estate when you die if the value of your estate exceeds a certain amount. Currently, inheritance tax is charged at 40% on the value of estates above the threshold (nil-rate band) of £312,000 (2008-09), subject to any exemptions and reliefs that may be available. Your estate is basically the net value of everything you own - all your assets minus any debts.

Your house is included in your assets. The number of homes in Britain worth more than the inheritance tax threshold has nearly tripled in the past five years, according to recent surveys. This means that thousands of more families will now be drawn into the Inheritance Tax net.

For example: a person dies leaving his children:

A house worth                                                                          £250,000
Other assets (savings, life insurance etc)                         £90,000
So, the value of the estate is                                                 £340,000
Minus the nil-rate band                                                          £312,000
Amount liable for IHT                                                              £28,000 @ 40%
TOTAL Inheritance tax payable to the treasury:                 £11,200

Many married couples choose to leave all their assets to their surviving spouse. Although there is no Inheritance Tax to pay when the first spouse from a marriage dies and leaves all their assets to the survivor, the downside for beneficiaries is that the combined estate will be taxed on the second death. No exemption currently applies in the case of co-habiting couples.

NOTE: From the October 2007 budget, changes were introduced that married couples and civil partnerships may combine their unused Inheritance nil-rate bands.

Trusts

There are several different types of trust including Discretionary Trusts, Accumulation and Maintenance trusts.Changes to Trust rules and Inheritance Tax were made in the last budget. We would therefore advise that your solicitor to discuss how these changes may affect you and to give further advice.

Tax free donation to charity

Another way many people choose to limit Inheritance Tax on their estate is to make a donation to charity - this would be completely free of Inheritance Tax.

Legacies received by Henshaws are so important to us, so that we continue to provide our range of services to blind and visually impaired people of all ages. These services include our Childrens and Families Services, Patient Support, Community Housing , Henshaws College and Adult Education.

For more information contact Henshaws' Legacy Manager, Tom Clark on 0161 786 3691 or e-mail tom.clark@henshaws.org.uk