A guide to charitable legacies

Charitable legacies that people leave in their Wills are a vital source of income to charities here in the UK and according to research, charity legacy income saw record annual growth of 6.5% in 2022/23, estimated to have reached £4billion¹.

This comes at a time when a growing number of UK charities are increasingly reliant on legacies in Wills.

We are regularly asked by our clients of all ages for advice on charitable giving when they are making their Wills on the type of charity to support and how much.

It is helpful to ask yourself the following questions:

• Are you planning to leave all of your estate to charity?
• Would you be happy to donate unwanted items from your house to a local charity shop?
• Have you or your family been supported by any charitable organisations that you would like to remember and thank?
• Are there any particular causes that are close to your heart such as the arts, children’s organisations, animal welfare, environmental groups or religious organisations for example?
• Do you want to support local organisations or those working at a national level?
• Are you interested in reducing your inheritance tax bill?

Whatever charity you choose it is vitally important to make sure that you specify which organisation you mean. We help with this by checking every charity against the Charity Register. Several clients have been surprised recently to find out that organisations they had planned to support were not actually charities at all. Not great for those hoping to reduce the inheritance tax payable on their estate.

Charitable legacies can reduce this tax liability from 40% to 36% and this fact alone motivates a number of our clients to use this relief to benefit charities rather than HMRC.

Also on the increase is the desire for people to give to local charities or to designate in their Wills that the funds should be used to support local good causes. If you are unsure where to start with that you could leave a legacy to your local Community Foundation supported by written guidance on the type of project or organisation you wish to support.

If you are considering leaving a charitable legacy in your Will, please contact us.

1 https://fundraising.co.uk/2023/11/20/another-record-breaking-year-for-legacy-income-but-forecast-warns-of-short-term-losses/