10% of estate to charity to reduce IHT rate to 36%

caveman8006

There was an interesting article in the Daily Telegraph at the weekend explaining how a bequest of at least 10% of assets to a registered charity could reduce IHT liability by  reducing the applied rate from 40% to 36%. However, it seemed to be based on the premise that the 10% only applied to the taxable part of the estate. Am I right in thinking that the 10% has to apply to the value of the whole estate (including home) so that the saving would be much less than implied?   

[Deleted User]

That’s exactly how I would read it too - quite misleading. For example, if the estate was worth 361000 and 10% was bequeathed to charity that would reduce the taxable rate payable from 40% to zero (ignoring property and TNRB). I agree with you.

Jeremy535897

See https://www.moneyadviceservice.org.uk/en/articles/the-tax-benefits-of-giving-to-charity

[Deleted User]

Jeremy535897 said:

See https://www.moneyadviceservice.org.uk/en/articles/the-tax-benefits-of-giving-to-charity

That’s makes more sense particularly as 10% of net estate is obviously different to 10% of the estate. 

40% less (10% of 40%) is 36% after all.