This week, (9 – 15 September) Remember a Charity is holding their annual ‘Remember a Charity Week’ to help raise the profile of charitable giving in Wills.
When asked 35% of people tell Remember a Charity that they would happily leave a gift to charity in their Will once family members and friends had been provided for. Unfortunately only 7% of people actually put this into effect. Many charities today rely heavily on gifts left by people in their Wills, however small they may be. Remember a Charity estimate that a mere 4% change in giving in Wills could generate £1billion each year to help worthwhile causes.
Charitable giving has its obvious benefits of course but can also provide an additional benefit to you and your estate by reducing the amount of Inheritance Tax payable.
Inheritance Tax may be due when an individual’s estate is worth more than £325,000. If you leave a gift to charity in your Will the value of the gift will be deducted from your estate before any Inheritance Tax payable is calculated. Inheritance Tax is then calculated at anything else above the threshold at 40% but this rate will be reduced to 36% if you leave 10% of your estate to charity.
You can leave a gift to charity through your Will either by leaving a fixed sum in any amount you wish or a portion of your estate after other gifts to family members and friends have been distributed.
If you already have a Will in place but wish to leave a gift to charity it is not always necessary to prepare a new Will. A gift to a charity or charities can be added to your Will by preparing a supplemental document known as a codicil which is executed in the same way as a Will and incorporates additional terms.
Leaving a gift to charity can provide you with the perfect opportunity to review your Will and if necessary prepare an up to date version. Our Wills should be reviewed regularly as our lives progress and change. Keeping your Will up to date ensures that your family and friends are provided for and able to deal with matters smoothly at a difficult time.
If you would like further information, our Wills, Trusts and Wealth Management specialists can advise you how to leave a gift to charity in your Will and on the appropriate measures to take to ensure the gift goes to your intended charity or cause. We can also provide advice as to any tax consequences of the gift as well as general advice with regard to Wills and Inheritance Tax.
Lucy Bloom, Solicitor