Why should I include a charity in my Will?
A guide to why you should remember a charity in your Will & the best way to leave money to charities.
Why should you leave gift to a charity in your Will?
Each year, people in the UK leave approximately £2.8 billion in charitable donations within their Wills. These donations are the largest single source of voluntary income to the charity sector and are therefore incredibly important to help support these important organisations. Despite this, only 6% of people actually leave a charity gift in their Will.
There are a variety of reasons as to why you should consider a charity in your Will, including benefits to yourself and your estate. Benefits include the ability to help a charity that you have supported throughout your lifetime or that you have encountered in difficult times. From a tax perspective, leaving a gift to a charity in your Will can be good for those seeking a way to mitigate the amount of Inheritance Tax payable upon death.
What’s the best way to leave money to charities?
There are three ways that you can leave money to a charity in your Will. Here are the types of charitable legacy you can choose from:
A residuary legacy is when you leave the whole of your estate, or a percentage of your estate, after all other bequests have been made and all costs and debts cleared.
A pecuniary legacy is a gift of a specified sum of money to your chosen charity. This is arguably the simplest and most common way of donating to a charity in your Will.
A specific legacy is a gift of a particular item to your chosen charity (e.g. books, vehicles).
What are the tax benefits of giving money to charities your Will?
The current Inheritance Tax threshold is £325,000 (£650,000 for married couples who leave everything to each other), meaning that Inheritance Tax is payable at 40% on the proportion of your estate that is valued above this amount.
Leaving a gift or money to a Charity within your Will is a way of reducing the amount of Inheritance Tax that is payable. Any legacy that is left to a charity is exempt from Inheritance Tax; and if you leave at least 10% of your net estate to charity, then it reduces the rate of Inheritance Tax from 40% to 36%.
If you want to include a charity in your Will, then speak to a member of the Redstone Wills team today to find out the best way for you to ensure your estate is left to those you care most about. Call us on 0808 281 1545 or contact us today.