More people than ever are giving to charity in their Will to mitigate their Inheritance Tax bill, a major study has revealed.
The research, published by a national legal services firm, shows that there has been a 61 per cent increase in charitable bequests, with almost one in three Will writers now leaving a gift in their final wishes.
But why are more people donating to charity in their Will? Here, Helen Jago, a Department Director with Palmers Solicitors who specialises in Wills and Probate, explains:
What are Charitable Legacies?
Charitable legacies are a donation to a charity in your Will. The gift can range from cash to property and investments or a percentage or share of the balance of your estate once all other payments have been made.
While many charities rely on legacy giving, there is still a large proportion of the nation that does not know that a gift can be left to charity in a Will.
Why are Charitable Legacies increasing?
The coronavirus pandemic, combined with rising house prices and the threat of large Inheritance Tax bills, have forced many to think about later life planning.
The latest statistics reveal that average house prices in the UK increased by 8.6 per cent in the year to February 2021 – tipping many estates into the IHT “danger zone”. And over the next five years, thousands more estates could fall into the tax-paying bracket.
What are the benefits of charitable giving in your Will?
While supporting a meaningful cause, legacy giving also helps families mitigate Inheritance Tax.
Charitable legacies are currently free of Inheritance tax so your chosen Charity can benefit from a tax free lump sum reducing your overall inheritance tax bill.
If a minimum proportion of your estate is left to Charity- normally 10% of the estate (although the calculation can be complex) – the rate on which Inheritance Tax is paid on your taxable estate will reduce from 40% to 36%.
How can I leave a gift to charity in my Will?
Our expert team can help you leave a gift to charity in your Will. For support and advice, please contact us.