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Leaving gifts to charity in your will
- AuthorGeorgina Vanden Berghe
The International Day of Charity takes place annually on 5 September, but did you know that one of the best ways to support a charity is to leave them a gift in your will?
Many charities in the UK rely on donations left 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 inheritance tax relief. In this article, we look at some of the most common questions people have about leaving part of their estates to charity in their will.
How can I benefit a charity in my will?
Generally speaking, there are two ways to benefit a charity in your will.
The first option is to very simply, specify any charities you wish to benefit from your will. Alternatively, you can leave money or property in a trust and leave it up 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 quite 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 help 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).
Is it possible for family members to object to a gift left to charity in my will?
Under the Inheritance Act, you must make reasonable provision in your will for any dependants you might have. If your will fails to provide adequately for them, anyone financially dependent on you can contest any charitable gift in order to obtain the financial provision you should have made for them.
Alternatively, it is possible for your will to be contested 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. However, if you wish to make a gift to a charity 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 inheritance 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 to 36%.
Contact our experts for further advice