Inheritance tax: leaving 10% of an estate to charity

A practice note about the lower rate of inheritance tax (IHT) of 36% for testators who leave 10% of their net estates to charity (section 7 and Schedule 1A, Inheritance Tax Act 1984). It explains how the 10% test works (with examples), and discusses the implications for testators, personal representatives, trustees, beneficiaries and charities, and how to draft wills for testators who want to benefit from the lower rate.

We would welcome subscriber's views on the practical consequences of this legislation, and in particular on the options for testators (see Your views).


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