The decision to leave a gift to charity in your Will is becoming increasingly popular; a survey by British Heart Foundation shows that 43% of people would be likely to leave money to charity in their Wills.
There are many reasons why you may wish to leave a gift to charity in your Will; perhaps the charity has supported you, family members or friends and you wish to give back. Alternatively, it may be a charity that you strongly support. Or it could be that you would like to repay and make a lasting impact.
Leaving to charity in your Will can also reduce the amount of Inheritance Tax you pay; currently, the Death Rate Tax is 40%. However, if you leave more than 10% of your estate to charity, this could reduce your Inheritance Tax rate to 36%. Alternatively, your donation can be taken from the value of your estate before Inheritance Tax is calculated.
It is important that your gift is made correctly. There are several ways in which you can gift to your chosen charity, or charities, in your Will. All gifts must be ‘outright’, meaning that they must go directly to the charity without conditions. It must also be gifted straight to the charity without another beneficiary having an interest in it. Lastly, for tax purposes, it must be gifted to a UK registered charity which carries a Charity Commission registered charity number.
Popular ways of gifting include:
- a pecuniary (monetary) legacy in which you leave a sum of money to your chosen charity, or charities.
- a specific legacy in which you gift personal property. For example, you could gift your house, or any other chattels you may possess.
- a residuary legacy which gifts a percentage of your estate once all other liabilities have been paid and all other gifts have been distributed.
Should you be interested in updating your Will to include a gift to charity please get in touch.