The tax benefits of giving to charity
If you’re worried about the amount of Inheritance Tax that might have to be paid when you die, giving away some of your money to Aberlour – in your will – can reduce the bill.
Leaving a part of your estate to Aberlour can reduce your Inheritance Tax bill.
This is because, if you leave a gift to Aberlour in your will, it will not count towards the total taxable value of your estate.
This is called leaving a ‘charitable legacy’.
The current inheritance tax threshold is £325,000 and the rate of tax is a substantial 40%. So for every £1,000 over the threshold, inheritance tax of £400 is payable to the Government, instead of benefiting your loved ones or the charitable causes close to your heart.
However, as legacies left to charities are exempt from this tax, leaving a gift to Aberlour in your will can help you minimise any inheritance tax liability.
You can also cut the Inheritance Tax rate on the rest of your estate from 40% to 36%, if you leave at least 10% of your ‘net estate’ to Aberlour.
Leaving a legacy to Aberlour is really worth considering; not just you can reduce the amount of Inheritance Tax that might have to be paid on your estate, but you could also help transform the futures of some of Scotland’s most vulnerable children; those who are marginalised or are born in the most deprived communities, who can often struggle to access the same opportunities as others.
The rules on how to work out what you can give away to charity to secure the lower tax rate aren’t always straightforward, so it’s a good idea to get the advice of a solicitor who specialises in estate planning.
Aberlour can recommend professional solicitors who can help you. Contact them today: https://www.aberlour.org.uk/free-wills-service/