Leaving money to charity in your Will in the UK

The above is a quote from Chuck Feeney, an Irish Entrepreneur and Philanthropist, who died at age 92 last month. Feeney transferred virtually all of his personal assets to the Atlantic Foundation during his lifetime. He was a fervent supporter of Giving While Living, encouraging other billionaires to give big while they are alive to see the impact. Feeney helped inspire Bill Gates and Warren Buffet to launch the Giving Pledge in 2010 which aims to persuade the wealthiest individuals in the world to give away majority of their fortunes in their lifetime or in their Wills.

Most of us probably don’t wish to give away majority of our fortunes, but if you are considering making a philanthropic gesture in your lifetime or in your Will, you have the power to make an extraordinary impact to those less fortunate. It is important to seek specialist advice to safeguard against unforeseen legal action by your family following your death.

How to do philanthropic giving

Your Will can be utilised in a number of ways in order to implement your charitable wishes. These can include a specific sum of money to a charity; leaving the entire estate or a percentage of your estate, or the creation of a charitable trust.

If you choose to create the charitable trust in your Will, you should be careful to ensure that the trust will comply with the requirements to be a valid charitable trust. If it fails to do so, it will be too late to take any remedial action and the gift would likely lapse. The alternative is to set up a charitable trust during your lifetime with a small sum of money registered with HMRC to ensure it is accepted as a charitable trust. You can then leave a more sizeable gift in your Will.

Inheritance tax liability

There is a specific exemption from Inheritance Tax where a gift is made to qualifying charities. This exemption applies both to lifetime giving and gifts on death.

There is a reduced rate of Inheritance Tax where the individual leaves 10% or more of their net estate (the value after the nil rate band and any other reliefs and exemptions have been applied) is left to qualifying charities. If the relevant criteria are satisfied, Inheritance Tax would currently be calculated at 36% rather than the current rate of 40%.

How can Blake Morgan help?

Our specialist Succession & Tax team at Blake Morgan are here to help you make the right decision. We can guide you through the process of making a Will and provide bespoke advice on estate planning and about how best to leave money to charity in your Will in the UK. By leaving a gift in your Will, you are making an impact on causes that matter to you.

Finally, by considering leaving a gift to charity in your Will, planning and reviewing your will at least every five years or following a change within your family (for example, marriage, divorce, birth or death of a loved one) you can ensure the terms of your will are up to date and benefit those close to you, be it family and friends or good causes.