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Inheritance tax cut could provide bonanza for charities

Treasury officials believe an estimated 5,000 people will leave more to charities in their wills following a change to the inheritance tax (IHT) rules.

The Chancellor, George Osborne, recently announced that if 10% of an estate is left to charity then IHT on that estate would be cut by 10%. This would reduce IHT from the current 40% to 36%.

The Government has now begun a public consultation seeking views on the proposal which is due to come into effect from April next year.

The Economic Secretary to the Treasury, Justine Greening, said: "The Government’s philanthropy package announced at this year’s Budget represented the most radical reforms to charitable giving for more than twenty years and is designed to encourage further financial support for charities.

"This reduced rate of IHT should provide an extra incentive for people to use their estate to support worthy causes and we very much hope that this consultation will mean we can get the details right so it can make a real difference."

The consultation runs until 31st August.

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