When you think about writing your will, your primary focus may be ensuring your loved ones are provided for. However, your will also presents a powerful opportunity to support causes close to your heart and leave a lasting impact on the world. Charitable giving in your will allows you to make a meaningful difference while also offering financial benefits, such as reducing your inheritance tax liability.
Why Leave a Charitable Gift in Your Will?
Including a charity in your will is a way to ensure your values and passions continue to make a difference beyond your lifetime. Whether you wish to support medical research, environmental conservation, or local community projects, your gift can provide vital funding for the causes you care about.
The Tax Benefits of Charitable Giving
In addition to helping good causes, charitable bequests can also reduce the inheritance tax (IHT) burden on your estate. In the UK, estates above the tax-free threshold (currently £325,000) are subject to inheritance tax at 40%. However, gifts to registered charities are completely exempt from IHT, meaning the value of your estate going to a charity is not taxed.
Furthermore, if you leave at least 10% of your estate to charity, the inheritance tax rate on the remaining estate can be reduced from 40% to 36%, potentially saving your beneficiaries a significant amount.
How to Leave a Charitable Gift in Your Will
Making a charitable gift in your will is straightforward, but it’s important to do it correctly to ensure your wishes are carried out. Here are the main ways you can leave a legacy gift:
A Fixed Amount (Pecuniary Legacy) – You specify an exact sum of money to be donated to your chosen charity.
A Share of Your Estate (Residuary Legacy) – You leave a percentage of what remains of your estate after all other gifts and expenses have been settled.
A Specific Gift – You donate a particular item, such as property, shares, or valuable possessions.
A Conditional Gift – This type of gift only takes effect if certain conditions are met (e.g., if a primary beneficiary has already passed away).
Ensuring Your Gift is Honoured
To ensure your charitable gift is properly executed:
Include the full name and registered charity number to avoid any ambiguity.
Discuss your plans with us to ensure the wording is clear and legally binding.
Inform the charity, if possible, as they may have guidance or special recognition for legacy donors.
Make a Difference Beyond Your Lifetime
A well-planned will is more than just a legal document—it’s a reflection of your life, values, and the impact you want to have on future generations. By including a charitable donation, you not only provide crucial support to the causes you believe in but also maximise the value of your estate for your loved ones.
At Peritum Wills, we can help you incorporate charitable giving into your will in a way that aligns with your wishes and benefits both your beneficiaries and your chosen causes. Contact us today to find out how you can leave a meaningful legacy.
Information provided and any opinions expressed are for general guidance only and not personal to your circumstances, nor are they intended to provide specific advice. Please contact us for specific advice in your circumstances.
The Financial Conduct Authority does not regulate Taxation, Trust advice or Will writing.
Peritum Wills is not authorised or regulated to provide financial advice.
Tax laws are subject to change and taxation will vary depending on individual circumstances.
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