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My client Mr X is the sole beneficiary of an estate with a gross value of
£1 million and a potential inheritance tax liability of £270 000. He is thinking of making a donation to a charity of £100 000. His employment income in 2010/11 is expected to be around £200 000.
If he makes the donation under gift aid I calculate he could potentially save income tax of £44 352.50 (£56 475 at 40% plus 43 525 at 50%).
Alternatively he could enter into a deed of variation for the estate which would save inheritance tax of £40 000 (i.e. £100 000 at 40%). The gift aid route looks prima facie better. But can both reliefs be claimed on the donation?
It strikes me that a deed of variation is still a donation by Mr X and when making a gift aid payment...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
