Charities and Philanthropy

Electing for a charity to benefit under your Will can be a very kind and altruistic action and can be achieved in a number of ways:

Three Ways to Benefit a Charity in your Will

  1. Leave a legacy – When an individual has a spouse or children, for example, it is understandable that they wish for the majority of their estate to pass to them. However, there may also be a charity you wish to acknowledge or recognise, and leaving a legacy (a specific sum of money or item) to a nominated charity is the simplest way to achieve this.
  1. Leave a proportion of the residue of your estate – You may decide that you wish for one or more charities to inherit all or a proportion of your estate. There is no limit to what you may leave, or how many charities you wish to benefit.
  2. Include charitable trust provisions – If there isn’t a specific charity you identify with, it is also possible to set up a public charitable trust to leave your estate to. This allows you to provide your trustees with instructions of how the funds should be used.

It is worth noting that any sums left to charity qualify for an IHT exemption, and so none of these funds will be subject to inheritance tax. For example, if you were to leave 70% of your estate to a charity, only the remaining 30% would be liable to IHT. This can be a useful strategy of reducing the size of your taxable estate.

In addition, if you were to leave 10% or more of your net estate to charity, your estate would also qualify for the reduced rate of IHT (36%, as opposed to 40%). Depending on the size and nature of your estate, you may benefit from adopting this approach rather than leaving your estate subject to IHT at the regular rate.

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