More than half of people in the UK don’t have a Will and only three out of 10 people say they have an up-to-date Will. During the pandemic 7% of people made or updated their Will.
Why leave gifts to charity?
Many people are leaving tax-free gifts to charities in their Wills to reduce the amount of inheritance tax (IHT) to be paid on their estate when they die.
Gifts to charitable causes are tax-free, and if you donate 10% of your estate to charity, the amount of inheritance tax due will be reduced from 40% to 36%, above the £325,000 tax-free threshold.
Many grieving families spend a long time completing detailed paperwork to report the value of a loved one's estate, even when there’s no inheritance tax (IHT) to pay.
Experts say the reporting requirements for possible inheritance tax bills are too complicated, not fit for purpose, and are overdue for reform.
Inheritance tax (IHT), normally at 40%, affects estates worth more than £325,000. The value of your estate is made up of property, money and possessions, after any debts have been settled.
A study by the financial services company, Canada Life, says Her Majesty’s Revenue and Customs (HMRC) collected £5.4billion of IHT in the financial that ended in April.
This is an increase of £200million on the previous year and £600million more than in 2017. The study predicts that the amount collected is likely to rise to £10billion by 2030.
Parents and grandparents can now leave property worth up to £950,000 to their direct descendants, free of inheritance tax (IHT), thanks to changes in the residence nil-rate band (RNRB), which came into effect on 6 April.