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Charitable giving – does it work for you?
Many people have charities that are close to their hearts and they choose to support them either by volunteering their time and or by making regular financial donations.
It is often a good idea to review your charitable giving and whether giving during your lifetime or leaving a legacy in your Will is the best option for you.
If you choose to leave a donation to a charity in your Will, then it will be taken off the value of your estate before inheritance tax is calculated. It can also help to reduce your Inheritance Tax rate if more than 10% of your estate is left to charity. You can donate in your Will in a number of ways:
- By leaving a fixed amount or a percentage of the value of your estate
- By leaving an item of value
- By leaving what is left of your estate once other gifts have been made
If you are planning to donate or sell land, property or shares to a charity, then it is worth taking professional advice (both legal and tax planning) regarding the timing of your donation, as you can pay less Income Tax in the tax year you make the gift or sale. There is also likely to be Capital Gains Tax Relief and advice should be sought before you make any sale or transfer
of ownership.
It is important to communicate your wishes regarding charitable giving to other beneficiaries in your Will, which can be done via a letter to avoid subsequent arguments. In a recent ruling however, a judge has overturned a decision that had seen a woman excluded from her mother’s Will. Despite the mother stating clearly that she didn’t want her estranged daughter to receive anything from her Will, the Judge ruled her actions “unreasonable, capricious and harsh” and awarded the daughter a third of the value of the estate.
Whether this ruling has any further repercussions we in the legal profession will have to wait and see. In the meantime, reviewing your own circumstances on a regular basis is always advisable.
Alex Astley is a partner at Gullands Solicitors and can be reached at
01622 689700
