Dorset Family Law

What are the benefits of leaving a gift to a charity in your Will?

The philanthropy of give to charity aside, are you aware of the tax benefits of leaving money to Charity in your Will? Private Client specialist Lesley Eveleigh explains:

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What are the benefits of leaving a gift to a charity in your Will?
Not only is a gift to charity free of inheritance tax (IHT), should you gift over 10% of your estate to charity and your estate is still subject to IHT, it will be charged at 36%, rather than the usual 40%.

What are the different types of legacy you can leave to a charity?
You can leave them a fixed sum of money, a particular asset, such as a shareholding or a house, or you can leave them a percentage of your estate.

Can you leave your entire estate to a charity? Can this be disputed?
In this country we have ‘testamentary freedom’, which means you are free to leave your estate to anyone you wish, including leaving everything to charity. However, potentially family members, anyone you have cohabited with over 2 years, and anyone who was financially dependent on you could make a claim against your estate under the Inheritance (Provision for Family & Dependents) Act 1975. Whether they are successful or not will depend on the circumstances.

How is your donation passed onto your chosen charity after your death?
Your Executor will need to account toa charity for your gift once they have access to your funds and after various
deadlines have passed. This is usually after they have obtained a Grant of Probate which can take some months. In any event, they should if possible account to the charity within one year of the date of death, otherwise ‘statutory interest’ is added to any fixed sum of money left to a charity (but not a share of your estate). This is known as the ‘Executors’ Year’.

How can a solicitor help you include a donation to a charity in your Will and ensure your wishes are carried out?
A solicitor can advise you on the best way to leave a gift to a charity. There are different implications for leaving either fixed sums of money, specific assets or a share of your estate and the procedures after your death and any costs associated with administering them, will be different. So it is important that you take professional advice. Your solicitor can also advise you on the IHT implications of leaving a gift to charity.

For further information please contact Lesley Eveleigh on 01935 846275 or email lesley.eveleigh@battens.co.uk

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