Budget 2011: IHT bills cut for those leaving 10% or more to charity
From next April, the IHT rate will be cut to 36% for those leaving part of their estate to charity, as part of the government's plan to galvanise a charitable Britain.
This tax change will mean charities benefit from an extra £300 million each year.
In addition, from next April IHT will be indexed against the consumer prices index measure of inflation, although the current £325,000 nil-rate IHT band is frozen until April 2015.
Jonathan Gain, chief executive of Stellar Asset Management, comments that the change is a "feel-good measure".
He adds: "There's potential for it to be very attractive, and I think people will give it greater consideration. It will change everybody's outlook."
However, he did mention that this year's Budget is "fairly quiet" from an IHT point of view.
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).
Everything you own: all your assets (property, cars, investments, savings, insurance payouts, artwork, furniture etc) minus any liabilities (debts, current bills, payments still owed on assets like cars and houses, credit card balances and other outstanding loans). When you’re alive this is called your wealth; when you’re dead, it becomes your estate.