Leaving donations to charity
Posted on 8th June 2021 at 09:06
Why leave gifts to charity?
Many people are leaving tax-free gifts to charities in their Wills to reduce the amount of inheritance tax (IHT) to be paid on their estate when they die.
Gifts to charitable causes are tax-free, and if you donate 10% of your estate to charity, the amount of inheritance tax due will be reduced from 40% to 36%, above the £325,000 tax-free threshold.
More people are paying inheritance tax
Many more people are likely to pay IHT because the values of property and other assets are increasing. Although the Chancellor announced this year that the threshold for IHT would be frozen until 2026, it has become a real concern for many people.
While people think mostly about their family and friends when they make their Will, including a gift to a charity is something many more people are now considering.
Your donation can make a difference
As charities across the country have seen their fundraising activities badly affected by the pandemic, legacy income has become even more important to them. Figures show that:
charity income from trading is expected to drop more than 17% during the next year
40% of voluntary organisations have just six months’ funding left in reserve
many charities now run fewer services than pre-pandemic.
Charities like Macmillan, for example, rely almost completely on donations to provide support for people living with cancer. Donations help them to provide physical, emotional, and financial support services.
The details of your chosen charity are important
If you want to leave money to charity in your Will, it’s important to include the following details:
the charity’s name
the charity’s address
their registered charity number.
To avoid any confusion, it’s very important to make sure the charity number is correct. It is common to find many charities with similar names and when charities merge your intentions might not be clear.
If you want to leave gifts to more than one charity, include clear detail for each one. You can find information on the Charity Commission website.
If an aspect of a charity’s work is especially important you can specify how you want your gift to be used. Ideally speak with your chosen charity to make sure that they can carry out your wishes – you might find that there’s another way in which you can help them achieve their goals.
If you would like to leave a gift to a charity in your Will and would like some advice, please get in touch.
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