Types of Legacy There are five types of gift that can be included in your will or in a codicil to an existing will. We recommend that you consult legal advisors before drafting a new will, updating an existing will or making other plans for your estate.
Residuary Legacy A residuary legacy is the gift of the remainder of your estate (or a percentage of the remainder) after all other gifts to family and friends have been distributed and all other testamentary debts and expenses have been paid. A residuary legacy increases in line with inflation.
Pecuniary Legacy A pecuniary legacy is a gift of a specific sum of money. When making a pecuniary legacy it is possible for you to index-link the gift in order to ensure its intended value over time.
Specific Legacy A specific legacy refers to the gift of a specific asset including stocks and shares or property, rather than a financial amount. These assets will be excluded from your estate valuation and are not liable for inheritance tax.
Reversionary Legacy A reversionary legacy is a “postponed” gift. It enables a named person to benefit from your estate during their lifetime and on their death, your estate (or part of it) then passes to Oakham School.
A Substitutional Legacy A gift of your estate to other persons which reverts to the School if they predecease you, such as Life Assurance. By taking out a policy naming Oakham School as a beneficiary, you can provide a substantial gift for the School with relatively modest premiums.
Tax Efficient Giving Oakham School is a registered charity (No. 1131425) and all legacies made to the School are exempt from UK Inheritance and Capital Gains Taxes. Under current rules, if you leave 10% or more of your taxable net estate to charity, the Inheritance Tax (IHT) rate on the whole of your taxable estate is reduced from 40% to 36%. Note that, in the example given below for an estate of £500,000, a donation of £17,500 diminishes the remaining estate by only £4,200. Without Charitable Bequest
With Charitable Bequest
£500,000
£500,000
(£325,000)
(£325,000)
£175,000
£175,000
Nil
£17,500
£175,000
£157,500
Gross Estate Less Nil Rate Band Net Estate Charitable Donation Taxable Estate Inheritance Tax Estate Available for Distribution
@40%
£70,000 £430,000
@36%
£56,000
£425,800 plus £17,500 to charity £443,300