Inheritance tax relief could 'discourage legacies of over ten per cent'

A commentator has said that the government's ten per cent Inheritance Tax Charity Relief may result in people making a will in which they leave less than they originally planned to charity.

At the Stimulating Philanthropy conference, Richard Kent of HM Revenue and Customs (HMRC) said the new proposal would mean that ten per cent was the most cost efficient amount to leave in a will, Civilsociety.co.uk reported.

With this amount, will beneficiaries would receive as much as they would if the legacy was only four per cent, he explained.

Mr Kent pointed out that if the charitable legacy is more than ten per cent the remainder of the assets left to other will beneficiaries will drop, meaning that this is a less cost efficient option.

However, Mr Kent added that people who were thinking of making a will in which they left less than ten per cent to charity may raise the sum they bequeath to this amount as a result of the government's proposal.

In addition, people can reduce their inheritance tax bill by making a will so that they do not die intestate, according to Ian Cowie, head of personal finance at Telegraph Media Group, who wrote the advice for the Daily Telegraph

Published by Hannah Carr