Blog
Leaving a gift to a charity in your will
- Posted:
- 29 April 2022
- Time to read:
- 3 mins
Businessman, Hamish Ogston, has recently announced that he is leaving his £130m fortune to various charities and will not be leaving anything to his children.
Parents are often referred to as “the bank of mum and dad” but for Hamish it is his intention that his children learn the value of money, like he did, and he wants his children to work hard for their own lifestyle.
Charities often rely on gifts made under a deceased’s will to keep the charity afloat financially, as most charities do not receive government or lottery funding.
Will I be able to leave a gift to charity in my will?The answer is yes. Anyone can leave a gift to a charity/charities under their will.
When executing your will, you can leave details of the name, postal address and charity number of the charity/charities that you would like to inherit part of your estate.
You can either leave the charity a fixed pecuniary legacy, of say £5,000, or you can leave a percentage of your residuary estate, for example 20%.
What are the inheritance tax implications of leaving your estate to charity?Did you know that any donation to a charity left under your will, will be taken off the value of your estate before inheritance tax is calculated. This means that by leaving your assets to charity, there are significant inheritance tax advantages in doing so.
If you leave 10% or more of your estate to a charity, this also reduces your inheritance tax rate from 40% to 36%.
How do you make sure it counts as a charity?It is always worth double checking that the charity is a registered charity with the Charity Commission, to ensure that it is a reputable organisation. Their website is https://www.gov.uk/find-charity-information
Could a gift cause friction with your family?Whilst some family members may be fine with you leaving a portion or whole of your estate to a charity, others may not be.
Did you know that under the Inheritance (Provision for Family and Dependants) Act 1975, certain categories of claimants can try to make a claim under the act if they believe a deceased person did not leave them sufficient financial provision.
If you are thinking about leaving a significant portion of your estate to a charity and not a loved one, then it is important to document this decision, to try and avoid an expensive legal dispute arising after your death.
Can I specify how the charity uses my money?You can include in your will stipulations as to what your gift is used for, but it is always best to discuss your wishes with the charity directly first. The reason for this is that the charity may not be able to comply with your wishes.
If you would like to make a will, please contact one of our will specialists. Leah is based in our Colchester office and can be contacted on 01206 217609 or [email protected].