Many people appreciate the important work that charities do across Britain and the wider world.
Much of this work is funded through donations from the general public, and this can be in the form of a money bequeathed by someone in their will — known as a legacy.
What a lot of people might not know is that leaving money to charity in your will can reduce the overall level of inheritance tax you are required to pay.
Graysons Solicitors recently spoke to three Sheffield charities — Bluebell Wood Children’s Hospice, Sheffield Royal Society for the Blind (SRSB) and Support Dogs — to find out the impact that legacies have on their overall funding. The charities confirmed that for some years, money left to them in wills accounted for as much as a quarter of their income, with one charity showing that this figure went up to more than a third over during one recent year.
Unfortunately, research specially commissioned by Graysons shows that people are less and less likely to consider leaving a legacy donation. As many as 48% of the 1,000 people questioned said they were ‘extremely unlikely’ to leave a legacy, with 9% ‘extremely likely’ and 9% ‘fairly likely’. This could have a huge impact on charities’ ability to conduct their crucial and much needed work.
However, these figures could change dramatically if more people were aware of the built in tax break that comes from leaving 10% of your net estate to charity. By making this commitment, you not only give to a worthy cause, you also cut the rate of Inheritance Tax (IHT) payable from 40% to 36%.
So if you are making provision for your will and would like to leave money to a charitable and worthwhile cause, remember that the amount you leave could be offset by a sizable IHT break.