22 October 2015
‘I don’t want to achieve immortality through my work; I want to achieve immortality through not dying,’ said Woody Allen.
That option isn’t open to any of us – but if you leave a charitable legacy in your will, you might achieve the next best thing.
When you write your will, your first thought will naturally be for your nearest and dearest. But wouldn’t it be good to make the last effective act of your life also one of the best? Leaving a gift to one or more charities of your choice is a chance to go out in a way you’d really want.
Charity 1, Taxman nil
If your estate is worth more than the inheritance tax nil-rate band (currently £325,000 per person) your beneficiaries will have to pay tax at 40 per cent on everything above this band. So if money will be lost to tax anyway, it makes a lot of sense to choose a charity to receive it instead – because the amount you give to charity won’t be taxed.
Even better, if you donate 10 per cent or more of your estate to charity, the inheritance tax on the rest will only be 36 per cent, instead of 40. And if your donation brings your estate down below the nil-rate band, your family will avoid inheritance tax altogether.
What are your options?
There are many ways to leave a gift to charity – some are very simple, others are more complex but come with certain advantages.
Remember, whatever your wishes, you need to specify them in a legally binding will or they won’t happen. We always recommend speaking to a professional advisor who can help you draw up a will that expresses your wishes clearly.
Making your will guarantees peace of mind, and remembering a charity gives you a part to play in their future.
Nick Green, Communications Manager at unbiased.co.uk
Find out more about getting professional advice and finding a charity to leave a gift to.