Thinking of leaving a gift to charity in your Will?

There are plenty of good reasons to think about leaving a gift to charity in your plans. Not only does it support a great cause, but it can also help ease the burden of inheritance tax.

Without some thoughtful planning, you might end up giving away more of your estate than you'd like.

When you decide to leave something to a charity in your Will, your gift can either:

·        Be subtracted from the overall value of your estate before inheritance tax is calculated.

·        Reduce your inheritance tax rate if at least 10% of your estate goes to charity.

You have choices when it comes to what you give—a set amount, specific items, or what's left after other gifts are taken care of (the residuary estate).

If you allocate 10% or more of your estate to one or more charities, you can lower the inheritance tax rate on the amount above certain thresholds, bringing it down from 40% to 36%.

It's a good idea to check if a charity is registered with the Charity Commission to make sure it's a trustworthy organisation. However, even if they're not registered, you can still utilise inheritance tax benefits if they qualify as a charity under the Charities Act. For example, you could leave money to your local sports club.

Keep in mind that if you specify donating a fixed amount to a charity, inflation might change its value significantly. Similarly, a percentage-based donation could end up being more or less than you intended if your estate's value goes up or down a lot.

It's a good practice to review your Will from time to time to make sure it still matches your wishes. Also, keep an eye on your inheritance tax plan to stay aware of all your options.

If you're interested in learning more about legacy giving or other strategies to mitigate your inheritance tax burden, don't hesitate to get in touch with us. As experts in later life financial advice, we can help you gain clarity and confidence in your inheritance tax and estate planning.

Call 0117 3636 212 or email office@haroldstephens.co.uk to arrange a relaxed chat about your circumstances or to request a complimentary inheritance tax review.