InsightsInsight - Charities, Wills and Probate - POSTED: November 11 2020
Why gifting is not just for Christmas
- Share this article
- Print this article
Following months of rolling lockdowns and a continuing global pandemic, you could be forgiven for not feeling in the Christmas mood this year. Regardless of how you feel, there’s still something to be said for giving gifts.
It is becoming more and more common to see advertisements from charities about leaving a gift in your Will. Some people give to charity during their lifetime by way of financial donations, usually set up by direct debits or standing orders.
In times of emergency, especially when the focus is on stopping the spread of a virus and lockdowns, charities work around the clock to provide support to those in need.
Now, with Christmas fast approaching, we will start to see people giving that little bit extra to charities, so why not make it a permanent thing and put a gift into your Will?
Benefits of gifting to charity in your Will
Leaving a gift to charity in your Will is an extremely generous thought and goes a long way. But what are the consequences of doing this once you have passed away, or even gifting to a charity when you are alive?
You may have heard of the seven-year rule – this rule relates to making a gift to someone, for example a one-off gift of £10,000 to a child. If you were to make a gift of this nature, then you will need to survive seven years from the date of the gift, for it to be completely out of your estate for inheritance tax purposes.
If you make a gift to charity during your lifetime (a lifetime gift) then the seven-year rule is not applicable. If you are also a taxpayer, the charity will also get the added bonus of gift aid on top of your donation.
Also any gift in your Will that is left to a charity is exempt from inheritance tax, which means that the charity does not pay tax on your gift and it will receive 100% of the gift.
Some individuals include charities in the residue of their estate. Once all debts, gifts and funeral expenses have been paid, everything leftover is legally known as the ‘residue’. A percentage of the residue can be left to one or more charities.
Not many people know that if you leave a minimum of 10% of your estate to a charity or several charities, you can reduce your inheritance tax liability from 40% (over available allowances) to 36%. This may not seem a lot but that extra 4% of your estate could go to family members, tax free.
So why not use this year’s festive period to review your Will and include a charity close to your heart?
Can we help?
Take a look at our Wills and Probate page for useful information, resources, guidance, details of our team and how we may be able to help you
Get in touch
Please fill out the below form or alternatively you can call us on 01622 690691