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 research shows this has now reached a new milestone worth over £3bn in 2018, the highest figure ever recorded.
We must all be thankful to the 6.3% of Will makers who include such generous gifts in their Wills, for who can truthfully say they have not benefited, directly or indirectly, from a charity during the course of their life.
It is estimated that if just one percent more people had left a gift in their Will, that alone would have raised an additional £109m for charities – a staggering amount. Typically, those that do give to charities in their Will tend to be female, aged 89 when they die and live in the South East.
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.
Last but not least remember that just by including a charitable gift in your Will, you will live an extra three years on average.
For further information please speak with your usual Kreston Reeves adviser here.
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