January 28, 2020

Charitable legacies – the hidden gem

Many charities are financially dependent upon people leaving gifts to them in Wills. Just 6% of people left a charitable legacy in their Will last year, yet this totalled £2.8 billion, over a quarter of total charitable gifting. Imagine the impact if more people gave even a relatively modest amount of their estate to charity. Fortis respect the right of each individual to do with their estate whatever they wish. However, we actively encourage clients to think about a charity legacy.

A high proportion of people will see themselves supported by a charity to a greater or lesser extent at some point during their lifetime but how many people have a Will written to pass a legacy back in return and so that other people may benefit in the future. Hospices, for example, do a fantastic job of supporting people towards the end of life but rely almost solely on gifting.

50% of the British Heart Foundation voluntary income is from legacy gifting and nearly two out of three guide dogs are provided out of chartable gifting income.

And gifting to charity can help reduce your Inheritance Tax bill. Charitable gifting, either gifting during life or upon death are completely exempt from Inheritance Tax. And in addition, if 10% or more of your estate passes to charity, the rate at which the remainder of your estate is taxed, above the Nil rate band which is currently £325,000 per person, reduces from 40% to 36%. For high-value estates, this 4% difference can make quite a difference.

But charitable gifting shouldn’t be limited to those with large estates, if a further 4% of people left an average-sized gift to charity, this would generate an additional £1 billion per year.

Fortis can talk to you about how your Will can help save and change lives and how you can benefit too.

If you'd like to leave a gift to charity but you're concerned that the gift will be used immediately, and won't have a long term impact, our advisors can talk to you about how trusts can help you leave a lasting legacy.

It starts with a simple conversation.

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