Legacy Giving
Giving Sir Gar would also like to promote Legacy Giving as a tax-effective way to give to charities and other good causes.
Legacies are an important source of income for charities and can enable them to be more sustainable. Legacy Giving helps them to make long-term plans knowing that funds may become available in the future.
A bequest is a gift you leave in your will to a person or organisation. By making a donation to a charity in a will, the total amount of inheritance tax due from the estate is reduced. There are different types of bequests, for instance:
- Residuary bequest: A gift of the remainder of your estate after all other gifts have been made and debts cleared. You may leave either the total of the remainder or a percentage of it.
- Pecuniary bequest: A gift of a fixed sum of money. The value of a pecuniary gift will decrease over time as the cost of living increases.
- Specific Bequest: A particular named item left as a gift in your will. For example, a piece of jewellery, furniture, a painting, etc.
- Contingent bequest: A gift in your will that is dependent upon the occurrence of an event which may or may not happen. For example a gift to a charity which applies only if other beneficiaries named in your will die before you die.
Legacy Giving reduces the total amount of inheritance tax due from the estate thus making it a tax-efficient to give to charity
Legacies are left through the donor’s will or by a declaration to the executives with instructions as to how and to which charity a legacy is to be distributed.
Inheritance Tax is the 40% tax paid when you die on the proportion of your estate that is over the nil-rate band threshold. This threshold varies every tax year. Further details on the current tax threshold are available on the HMRC website at: http://www.hmrc.gov.uk/cto/iht.htm
You should always seek advice from your solicitor when making changes to your will.
“Raising as much as £1.5 billion each year, charitable donations are the largest single source of income to UK charities.”
Lindsay Boswell, chief executive of the Institute of Fundraising.
