Is it a good idea to include a charitable gift in my will?
What is a charitable gift?
A charitable gift is where you leave a sum of cash, property, possession, or a share of your residuary estate to a charity in your will.
Why should I make a charitable gift?
Making a charitable gift in your will is a good way of making a positive impact after you are gone.
Charitable gifts also offer benefits for inheritance tax planning.
There are two ways you could leave a charitable gift in your will:
- A Legacy
A legacy is a specific gift, such as a fixed sum of money, property or a possession. You can specify how much you would like to leave to charity or identify the property or items you wish to leave the charity.
- A Share of your Residuary Estate
Your residuary estate is the remaining value of your estate once all debts, liabilities, administration expenses, legacies, and inheritance tax (if applicable) have been paid.
The amount the charity will receive will be determined by the value of your estate rather than a fixed amount.
What are the tax benefits of leaving a charitable gift?
Charitable gifts, whether a legacy or your residuary estate, are exempt from Inheritance Tax. However, if the estate is also being left to other people, then care must be taken on the drafting of your Will, to avoid any unintended tax consequences.
Furthermore, if you leave 10% or more of your estate to charity the inheritance tax rate of 40% is reduced to 36%.
It is important that you take expert legal advice when making a Will and our skilled solicitors at Nantes Solicitors will be happy to help you with this. To book an initial appointment please call us on 01305 422313 or via our main contact page.
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