Leaving Money In Your Will To Charity and The Inheritance Tax Benefits
Writing a Will can be a good opportunity to leave money to a charity that is important to you and can also have inheritance tax benefits for your family.
Why Should I?
After making sure you have covered the future for your friends and family, leaving even a small amount to a charity can be a huge help.
Sian Thompson, our Partner based in Leeds believes; "Charitable giving is a marvellous way to give something back to society and we can all afford to make a gift in our Will even if only a small amount."Remember a Charity
is a consortium of over 140 charities, they also note; "It's a little known fact that most charities wouldn't survive without gifts in wills."
Co Creator of The Simpsons, Sam Simon, recently died aged 59 after a battle with colon cancer. He has been celebrated for leaving a large amount of his money to charities in his Will
. Simon expressed in an interview with Reuters that he had "a desire to help animals"
. He also founded the Sam Simon Foundation
, a non-profit organisation which trains dogs rescued from shelters to assist disabled people.
Inheritance Tax Benefits for Gifts in Wills
Sian recommends; "Those with more to give can give a legacy to charity. A legacy can be an effective way of saving money on your Inheritance Tax."
If 10% or more of the net value of the estate is left to charity, the Inheritance Tax can be paid at a reduced rate of 36% as opposed to 40% on some of the assets.
How Can I Do It?
Sian recommends; "It is very important to make sure the charity you would like to leave money to is a qualifying charity. Charities that qualify will have a tax exempt reference number, so you can ensure this by asking them for the number."
Remember a Charity also highlight the need to make a note of the official charity name, address and charity registration number to give to the person who is providing you with Will writing advice. They have a search tool on their website which can help you with this.
The Importance of Accurate Tax Forms
Estates are currently not subject to tax if they are under £325,000. If the assets are over this amount, they are taxed at the rate of 40%.
Theresa Bunn, aged 56, has recently been jailed for failing for two years to disclose to HMRC the true value of her aunt's assets
. She stated that she inherited £285,000
, when in fact she had been left £1.5m
Sian advises; "When applying for probate it's crucial that tax forms are completed accurately and with the gravitas the whole process deserves. The executor is personally liable for errors, whether intentional or not.""This process can be very confusing to understand. My advice would always be to get professional support if you are at all unsure about any part of the legal or tax requirements."