Leaving Charitable Gifts in Your Will
Leaving a charitable gift in your will is an easy, impactful way to support causes you care about. Whether it’s a fixed sum, a specific item, or a share of your residuary estate, legacy giving can create a lasting difference — and it can be tax-efficient. Gifts to UK-qualifying charities are usually exempt from Inheritance Tax (IHT).
Ways to leave a gift to charity
- Pecuniary gift: a specified sum of money to a named charity.
- Specific gift: a particular item (e.g. property, jewellery, artwork, shares).
- Residuary gift: all or a percentage/share of your residuary estate (what remains after other gifts, debts and expenses).
You can combine gift types and benefit more than one charity. If you want your executors to choose (or choose from a list), ask your solicitor to draft a clear charitable power with a fallback to protect tax relief.
Identifying charities correctly
Avoid confusion by using the charity’s full name, registered address, and registration number. Include a successor/similar charity clause so the gift can still be applied if your chosen charity merges or ceases. (Courts can apply the cy-près doctrine where the original purposes can’t be carried out.)
Inheritance Tax benefits
Gifts to UK-qualifying charities are IHT-exempt. If you leave 10% or more of the baseline/net estate to charity, the IHT rate on the remainder may reduce to 36%. Because the 10% test can be technical (and may be applied to components of the estate), ask your solicitor to word the clause to ‘meet the 10% test’ and model the effect using HMRC’s reduced-rate calculator.
Ensuring your will is valid
Your will must be in writing, signed by you, and witnessed by two people who are not beneficiaries (nor their spouse/civil partner). If your circumstances change, you can make a new will or add a properly executed codicil.
Practical steps and professional advice
- Be specific: make your instructions clear.
- Keep records: tell your executors where the will is stored.
- Appoint executors: people you trust (family, friends or professionals).
- Seek advice: a solicitor can ensure the will is valid, gifts are identified properly, and clauses are tax efficient.
Optional planning tool: Within 2 years of death, beneficiaries may use a Deed of Variation to redirect part of an inheritance to charity; HMRC requires notification to the charity for IHT treatment.
Conclusion
Leaving a charitable legacy lets you support the organisations that matter to you and can reduce your estate’s IHT. For best results, take advice so your will is clear, valid and tax efficient.
sarah.clacker@mogersdrewett.com