Save Tax When You Leave Your Legacy Charities need our help more than ever before: Covid-19 lockdown and continuing social distancing rules have stopped many from raising vital funds. So many charities are struggling now, their reserves fast running out. Legacies are the vital lifeline they need to survive in these difficult times. Bequeathing money to a worthy cause close your heart is a wonderful act of generosity – especially now. Your kindness will be hugely appreciated by the charity and its beneficiaries. But it pays to take expert legal advice first. There are generous tax benefits that will help your gift to go a long way (and potentially benefit your loved ones too). Tax-Efficient Legacies
of thousands in many cases. So you’ll be able to give more of what remains in the estate to your loved ones and less to the taxman. But if you donated only 9% of your net estate to charity, this opportunity would be lost. And here’s the tricky bit. The value of your estate will be changing as some of your assets (such as property and shares) rise or fall in value. So you’ll need to be certain that the amount you leave to charity remains at or above 10% of your net estate if you are to benefit from the IHT reduction.
Good news – any gift you make to charity is free of Inheritance Tax (IHT). There’s no limit. You can How Much Will Be Left After donate as much as you like to Your Charity Legacy? charity and it won’t be subject to a penny of IHT. Leaving money to charity is such an emotional decision that And if you donate 10% (or more) of sometimes it’s all too easy to forget your net estate to charity, the IHT the practicalities of the process. liability on what is left drops from If you leave a fixed sum to charity 40% to 36%. (or anyone else) in your Will, then the executors are legally bound to That may not sound much of a reduction but it can save you tens pay out that money first. 36
