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Leaving Gifts to Charity in Your Will – What You Need to Know
With almost 90% of people in the UK contributing to charitable causes in the past year, it is not surprising that many would like to benefit their chosen charities once they have passed away. However, studies show that only a relatively small proportion (7%) of people actually leave gifts to charity in their Wills, perhaps due to an understandable wish to leave their hard-earned assets to people close to them.
However, what many people do not realise is that leaving gifts to charity in your Will could be beneficial for Inheritance Tax purposes; potentially allowing you to leave a slightly larger overall amount to your chosen beneficiaries.
An important point is that gifts to charity are exempt from Inheritance Tax. This means that any value you leave to charity will pass free of Inheritance Tax on your death.
More interestingly, perhaps, is the fact that if you leave at least 10% of your estate to charity on death could reduce the rate at which Inheritance Tax is charged on the balance of your estate from 40% to 36%. The overall aim of the reduced rate of tax is to allow testators to leave more to charity whilst passing as much as possible to family members – the net effect of which is to reduce the amount passing to the tax man.
Securing the reduced rate of Inheritance Tax can, therefore, be a real win-win situation for people hoping both to benefit a worthy cause and leave as much of their estate as possible to their family and friends. Drafting a Will to achieve this aim can be complex, however. Our Wealth Management team would be happy to help with drafting Wills to reach your charitable aims.
If you are concerned about Inheritance Tax and want to mitigate your potential liability, or would like advice about giving to charity in your Will, do feel free to get in touch with our Wealth Management Team, call us on 01392 207020 or email: email@example.com.