Charitable Gifts in Wills – No gift is too Small
In his latest blog, Wills & Probate Solicitor Matthew Kelly discusses charitable gifts in Wills…
You may wish to leave a gift or legacy in your Will to a single charity or various charities and there a few key points anyone considering making provision for charities should be aware of.
What Can I Leave To A Charity?
The charitable gift can be: –
• a specific/personal item e.g. musical instrument, vehicle, house, shares etc.
• a fixed amount of money e.g. £500.
• a share of your assets/estate e.g. 10% of my residuary estate.
Which Charity Can I Leave A Gift To?
When choosing which charity or charities to benefit, people are often passionate about a particular cause, or they have been impacted either directly (life changing experiences, such as a loss of a family member), or indirectly in some way by the charity (seeing hardship in developing countries).
It is important to be aware that gifts in Wills are often the single biggest fundraising source for the charity. Your gift will make a difference.
The Charity Commission website has a full list of all charities registered in England and Wales. https://www.gov.uk/government/organisations/charity-commission
Charitable Legacies And Inheritance Tax (Reduced Rate)
Generally, a gift to charity in a Will is exempt from Inheritance Tax so any provision for charities does not reduce the Nil Rate Band of £325,000.00 which is the primary Inheritance Tax allowance that benefits an estate. As such, provision for charities do not prejudice the other, non-charitable, beneficiaries from an Inheritance Tax perspective.
Inheritance Tax is only chargeable to the extent an estate exceeds the threshold (Nil Rate Band and other reliefs available to the estate, which can vary depending on your situation). In the event an estate is subject to Inheritance Tax then the standard Inheritance Tax rate is 40%.
However, a reduced rate of Inheritance Tax applies where 10% or more of the net estate (after deducting IHT exemptions, reliefs and the nil rate band) is left to charities, in such cases a reduced rate of 36% applies. In the context of a taxable estate generous provision for charities, 10% or more, actively reduces the tax burden on the other beneficiaries.
In conclusion, any provision for a charity under a Will, large or small, will be greatly received by the charity and will make a difference.
More information in relation to Inheritance Tax can be found here: https://www.timms-law.com/wills-and-probate/inheritance-tax/
Timms Solicitors Supports Charitable Gifts In Wills
At Timms, we support different charities and Will writing schemes throughout the year and the most popular are The National Free Wills Network (134 charities supported throughout the year) and Cancer Research UK Free Will Service.
If you would like more information about Wills and Legacies to charities then please contact me on 01283 561 531 or at firstname.lastname@example.org