Posted: Tuesday, 7 September 2021 @ 14:39
many people, leaving money to a charity in their Will is a way of saying thank
you for the help they or their loved ones have received during their lives.
rely heavily on gifts they are left when people die. But leaving money to
charity can also benefit your estate, by way of an Inheritance Tax break.
and charitable bequests
you leave 10 per cent of your net estate to charity, then in most cases there
is a reduction in the amount of Inheritance Tax paid from 40 per cent to 36 per
addition to this, gifts to charity are exempt from Inheritance Tax.
to leave money to charity in your Will
having your Will drawn up, it is important to use the correct name of the
charity together with its registered charity number.
merger clause should also be included in your Will so that the charity can
still receive your gift even if it has merged with another charity and has a
can also leave your bequest in such a way that, should your chosen charity cease
to exist, your gift can go instead to another charity that is carrying out
you would like the money that you leave to be used in a specific way, you can
put this request in your Will. It can either be a wish or alternatively a
binding obligation. You should note that if you make it a binding obligation
that the charity uses your money for a particular purpose, they may be unable
to receive the gift if they are not able to put it to that use, so the gift
type of gift you can leave to a charity
often choose to leave a specified sum of money to charity. This is known as a
pecuniary legacy and it will take priority over a gift of the residue of the
estate. For example, if £10,000 is left to charity, then the residue of the
estate is to be shared between family members, the £10,000 gift will be paid
is also possible to leave a valuable item to a charity, although this is less
common. For example, you could leave a painting or a property or shares. This
is known as a specific legacy.
you can leave a residuary legacy. This is the remainder of the estate after all
debts have been paid and after all pecuniary and specific legacies have been
made. You can leave the whole residue or a share of it.
writing your Will, you should take into account that over time the residue of
your estate could change substantially. For example, if you have to pay out a
substantial amount in care home fees, the residue could be much less than you
originally estimated. Or if you come into money, it could be much more.
is always recommended that you review your Will from time to time, around every
five years or if there are any major changes in your life. In addition, you may
need to make changes if anyone who is named in your Will as an executor,
trustee, guardian or beneficiary dies.
you are thinking of leaving money to charity, it is important to seek legal
advice to ensure you fully understand the tax implications and that your estate
is structured in the most efficient way possible.
Provided by Sue Ioannou, Chair & Head of Training