You can leave your money free of Inheritance Tax up to a certain amount. For each £100 above that amount, when you leave £60 to your friends and family, £40 will go to the Treasury, unless you take control of your money and leave that £100 to a charity of your choice.
That way, you decide how your money is used. Your money, left as a legacy in your Will, could make a real difference to your chosen Charity.
Let’s assume that on your death your estate is more than the maximum amount that can be left free of Inheritance Tax. You might decide that the tax-free portion is enough to meet the needs of your family and friends. After all, any more will be subject to 40% tax.
So why not leave that part to your chosen charity, which will be able to use the whole amount in the way that you wish it to be spent?
Did you know… if you leave at least 10% of your taxable estate to charity, the Inheritance Tax rate for the rest of your estate decreases from 40% to 36%.
The first step is to make a Will. Far too many of us die without doing so; this may result in your money not going where you intended and in Inheritance Tax being payable to the Treasury. By setting down who gets what, you ensure that you decide what happens to your money when you die.
You may have reduced any Inheritance Tax liability by giving your money away during your lifetime. But if, like most of us, you’ve set some aside for your later years, then a Will containing a gift to Charity may avoid Inheritance Tax being payable on your death.
Your Will can:
• leave a fixed sum to one or more charities: “I leave £10,000 to Charity X (registered charity number XXX)”
• leave a part of your estate (after any specific gifts) to a charity: “I leave Y% of the residue of my estate to Charity X (Registered Charity Number XXXX)”
Should you prefer your gift to remain private, there are ways you can leave your money for the benefit of a Charity without naming the Charity or stating the size of the gift in your Will; a solicitor will be able to advise on this.
Which registered Charity you leave your money to is entirely up to you. It really depends on you what interests you most. Deserving causes include:
Many charities support those who have served in the UK Armed Forces and their families.
Closer to home, there are charities supporting local communities in the spheres of housing, addiction, young people and the aged.
A growing problem in our society, especially amongst the young. You might put your money to work for those with mental health issues.
Most diseases and medical conditions, along with their patient and family support groups, have associated charities.
You could choose to support your local hospice or a cancer nursing charity.
You could support a local school or college charity, perhaps helping to provide bursaries for students.
There are endless opportunities to help those struggling abroad, especially in the wake of famine and other natural disasters. Many charities work supporting refugees, seeding small enterprises and farms, or providing water and healthcare.
There are many charities supporting children in the UK, those without a stable home, in poverty, or suffering mental health or other difficulties.
Performing and visual arts, from local groups to major organisations and venues, benefit from charitable support.
You could decide to donate to charities that support animal welfare, providing healthcare for pets or perhaps funding a local rescue centre.
Inheritance Tax Zero is independent of any particular charity or charities. We’re simply here to encourage you to take more personal control of what happens to your money when you die, by leaving more in your Will to a Charity you care about.
Our website does not provide legal or financial advice.
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If you’re saving your money to provide for your needs in old age, you may already have decided that it won’t necessarily go to your family. If so, why leave it to them on your death, when a part of it may be subject to Inheritance Tax?
The latest figures show that children inherit at an average age of 61. You might ask yourself, how much will they really need it by then?
A lot of Inheritance Tax revenue comes from smaller estates, where an increase in house values pushes it into the Inheritance Tax band long after a Will has been made. By making a gift to charity out of what is left after express gifts of specified amounts (a residuary gift), you could avoid this.
Lastly, the money paid in Inheritance Tax goes straight into the general coffers of the Treasury and can be used in any way the Government (of the day) may choose. So why don’t you choose instead?