Charitable giving through Wills is an impactful way to support causes you care about while also potentially reducing the tax burden on your estate. Here at Robertsons Solicitors, our Wills, Trusts & Estates team can help you navigate the legal intricacies to make the most of your philanthropic intentions.
Tax Benefits of Charitable Giving
One of the primary benefits of leaving gifts to charity in your Will is that these gifts pass free of Inheritance Tax (IHT). This means that the full value of your charitable bequests goes directly to the charities you choose, rather than being reduced by taxes.
Additionally, if you leave at least 10% of your net estate to charity, you may qualify to pay IHT at a reduced rate of 36%, down from the standard rate of 40%. This not only supports charitable organisations but can also result in significant tax savings for your estate.
Capital Gains Tax Considerations
For those with assets that have appreciated in value, charitable giving offers another advantage. If a chargeable gain would arise from selling estate assets intended for charity, these can be ‘appropriated’ before being sold. This means there is no Capital Gains Tax payable on these assets, ensuring that more of your estate’s value is preserved for your chosen charities.
The Impact of Giving
Giving through Wills is a crucial funding source for charities. According to Remember a Charity, currently, 6% of people leave a gift to charity in their Will. However, if this increased to 10%, it could generate another £1 billion for good causes each year. This statistic underscores the significant impact that increased charitable giving can have on society.
The Benefit of Unrestricted Giving
Unrestricted gifts are especially valuable to charities, as they allow organisations to allocate funds where they are most needed. This flexibility can help charities respond to emerging challenges and opportunities more effectively.
By incorporating charitable giving into your Will, you not only contribute to causes you are passionate about but also benefit from various tax advantages. Our team at Robertsons Solicitors is here to help you structure your estate plan to maximise these benefits and make a lasting impact.
