Charitable giving in a will

Giving a gift in your will to a charity is a popular way to give away a share of your estate to causes which you care about. To some charities legacies are almost essential for their survival.

Charitable giving in a will

Giving a gift in your will to a charity is a popular way to give away a share of your estate to causes which you care about. To some charities legacies are almost essential for their survival. It is possible to leave a cash amount, an asset, or a share of your residuary estate to one or several charities, or even put charities as substitute beneficiaries, where a beneficiary fails to take their gift, for example, should they predecease you, then the charity could take in their place. Any gifts to charities are exempt of inheritance tax.

Recent changes in the legislation concerning inheritance tax have now made it more advantageous to give to charity in your will. In basic terms, where 10% or more of an estate is given to a charity, if there is any inheritance tax to pay, then the rate of tax is reduced from 40% to 36%. It is possible to draft the will in such a way to gift 10% of your estate to charities, but the wording required to ensure this is effective is somewhat complex. If this is something you would like to include in your will then we can help. It is possible, in some circumstances, usually where there is already a gift in the will, to give extra to charity to result in a tax saving.

If you want to leave money to a charity, it is important to make a will. If you don’t make a will your estate passes according to the intestacy rules, to members of your family in a specified order. There is nothing in the intestacy rules about gifts to charities.

Other Charitable giving

Regular gifts to charities from income qualify for gift aid, where the government will give an extra 25p for every £1 donated to charity for basic rate tax payers. For higher rate tax payers the amount is 37.5p for each £1.00 donated. This is the equivalent of the government giving back the tax paid on the earned income. Gifts can also be made via payroll giving where the funds are given from your income gross of any tax at all.

Last year, and every November our firm participate in Will Aid where the Wills, Trusts and Probate department draft wills for clients and ask that instead of payment, a donation is made to charity. Last year donations made by Attwaters Jameson Hill clients totalled over £10,000. We are also involved in a charitable Will week for Haven House Children’s hospice this year, and we are supporting Isabel hospice, as our charity of the year.