Budget 2011: IHT slashed by 10% for charity gifts

Estates will benefit from a 10% discount in inheritance tax (IHT) if they leave part of the money to charity, George Osborne said today in the Budget speech.

IHT is currently charged at 40% on estates worth more than £325,000, the nil-rate band, following their owner's death. It is also levied on assets transferred in the preceding seven years. The nil-rate band can be transferred to the surviving spouse, creating a combined tax-free allowance of £650,000. Darling froze this threshold for four years in March 2010's budget.