Article written by Jeremy Brooks, Solicitor, Private Client department
International Day of Charity took place on 5 September 2021, but did you know that one of the best ways to support a charity is to leave them a gift in your Will? Many UK charities rely on donations left behind by their supporters, and any gift you leave could make a vital difference to the work of the organisation. There are many benefits to leaving money to a charity for your estate too, including tax relief. In this article, we look at some of the most common questions people have about leaving money to charity in their Will.
How can I leave money to charity in my Will?
There are two ways to leave money to charity in your Will.
The first option is to simply specify any charities you wish to benefit from your Will. Alternatively, you can leave money or property in a trust and leave it to your trustees to decide.
Where you choose to name a specific charity, it is always best to include the charity number. Many charities have similar names, or the name of the charity may change, and you want to be sure your gift goes to where it was intended.
If you choose to let the trustees decide where your money goes, you may wish to leave instructions to guide them.
What can I leave to charity in my Will?
You have several options for what to leave a charity in your Will, and you may wish to consider what might benefit them the most. Your gift may be:
- A cash amount
- A specific property or asset
- Your residuary estate or a share in your residuary estate (your residuary estate is what is left after other specified gifts, costs, and tax).
Can family members to object to a gift left to charity in my Will?
Under the Inheritance (Provision for Family and Dependants) Act 1975, you must make reasonable provision in your Will for any dependants that you have. If your Will fails to provide, a family member can contest any charitable gift to obtain the financial provision they are entitled to under the law.
Alternatively, it is possible for a family member to contest the Will on the grounds that you were under undue influence or not of sound mind when you made the gift.
Do I need to pay tax on charitable gifts in my Will?
Any gift left to a UK charity is free of inheritance tax liability (though it is worth noting that if the charity is outside the UK the situation is more complex). Not only are charitable gifts tax-free but leaving gifts to charity in your Will could mitigate your tax liability overall. When you leave at least 10% of your estate to charity, the inheritance tax liability of the rest of your estate falls from 40% to 36%.
For further information on Wills and estate planning, please feel free to email me or contact a member of the Private Client department on 020 8858 6971.