Many people choose to leave a gift to a charity in their Will. They choose to leave money to charities that have affected themselves or a loved one for the most part, or local causes that they feel passionate about.
Gifts to a charity in a Will (also known as charitable legacies) are usually exempt from Inheritance Tax. To qualify for this tax exemption, a charity must have a Charity Reference Number from HM Revenue & Customs. Furthermore, if you leave more that 10% of your total estate to charity, then your overall Inheritance Tax amount will reduce from 40% to 36%.
Gifts in Wills
There are three types of gifts that can be left to charity in your Will. These are:
- Residuary gifts- a share or percentage of an estate after all other payments have been made.
- Pecuniary gifts- a specific sum of money.
- Specific gifts- a particular item or items.
Furthermore, you can leave anything you own to charity, including property, land, shares, money, or a specific possession. There is also no limit to the amount you can leave to charity or the number of charities you can leave a gift to. It is important to think carefully about what gifts you would like to leave to charity, as you may have specific requests that you may need to discuss with the charity.
The Impact of Charity Gifts in Wills
According to Co-Op, around 13% of all charity income in the UK comes from legacies. Further to this, they have also stated that they have seen a rise in charitable donations in Wills made during lockdown.
Cancer charities are amongst the most donated to charities in Wills, followed by local charities. Cancer Research UK state that without legacy gifts, they would not have made progress in their research. They also state that a third of their donations come from legacy donations.
The organisation Remember A Charity state that currently, 6% of people leave a gift to charity in their Will. They aim to help people realise the potential that leaving gifts to charity in their Wills has and ensure the essential work of charities lives on for future generations. They estimate that if 10% of people left gifts to charity in their Wills, then it could generate another £1 billion each year.
How to Leave A Gift to Charity
It is easy to leave a gift to charity in your Will. Firstly, you need to choose a charity. You must then make a note of the charity name, address, and registered charity number. There is a website called the Charity Commission that you can use to find the details of the charity.
After you have chosen your charity and made a note of all their details, all you have to do is contact your solicitor or Will writer to provide them with the details of your chosen charity.
Here at The Inheritance Experts, we know how important it is for people to get their Will in correct order. If you are looking for advice on Wills, contact us today by filling in our contact form, or by calling us on 01614138763 to speak to one of our friendly knowledgeable advisors.