Charitable bequests are a very much appreciated source of revenue for charities who rely on donations to enable their work to continue. The importance of a charitable bequest cannot be overstated. Your much needed help can enable your favourite charities to survive. Everyone has a charity they have a connection with and we can choose in our will to give valued support to that charity.
The extra benefits of a charitable gift
As well as benefiting worthwhile causes, making charitable gifts in your will can have significant tax benefits. Whatever you give to a registered charity in your will reduces the taxable value of your estate and consequently cuts any inheritance tax due. You can make even further inheritance tax savings where you leave at least 10 per cent of your “taxable estate” to charity - this can cut the tax rate from 40 per cent to 36 per cent. The real cost of making a charitable donation, considering the tax savings, results in being significantly less to your estate.
Three ways of making a charitable gift
1. Fixed cash
Leaving a fixed cash sum is probably the most common way of making a charitable donation.
Leaving a particular asset, such as house contents or an actual property to a charity.
Leaving a percentage of what is left of your estate to charity, after deducting estate costs, any tax, and any other gifts.
Deciding where to leave your charitable gift
If you are not sure which charity to choose or if you are worried that certain charities might not be around, then you can ask your executors in your will to decide. You can leave a letter of wishes setting out guidance to them, to assist them in making their decision.