What are the benefits of leaving a gift to a charity in your Will?

The Battens Charitable Trust was set up in 1985 by Battens Solicitors to help local charities across Somerset and Dorset. Since then the BCT has donated more than half a million pounds to deserving causes, and during the recent pandemic it was also proud to play its part by increasing donations to local food banks and supporting key workers at hospitals in the south west region. Many of those donations were a result of people gifting money through a Will. But what are the benefits of donating to charity in your Will? Private Client Senior Associate Christine Butterfield explains.

Many charities such as the Battens Charitable Trust rely on the generous and kind hearted donations from people who want to make a real difference to their local communities. But there are unexpected benefits if you choose to donate. Not only is a gift to charity free of inheritance tax (IHT), should you gift over 10% of your estate to charity and your estate is still subject to IHT, it will be charged at 36%, rather than the usual 40%.

What are the different types of legacy you can leave to a charity?

You can leave a fixed sum of money, a particular asset, such as a shareholding or a house, or you can leave them a percentage of your estate.

Can you leave your entire estate to a charity? Can this be disputed?

In this country we have ‘testamentary freedom’, which means you are free to leave your estate to anyone you wish, including leaving everything to charity. However, potentially family members, anyone you have cohabited with over 2 years, and anyone who was financially dependent on you could make a claim against your estate under the Inheritance (Provision for Family & Dependents) Act 1975. Whether they are successful or not will depend on the circumstances.

How is your donation passed onto your chosen charity after your death?

Your Executor will need to account to a charity for your gift once they have access to your funds and after various deadlines have passed. This is usually after they have obtained a Grant of Probate which can take some months. In any event, they should if possible account to the charity within one year of the date of death, otherwise ‘statutory interest’ is added to any fixed sum of money left to a charity (but not a share of your estate). This is known as the ‘Executors’ Year’.

How can a solicitor help you include a donation to a charity in your Will and ensure your wishes are carried out?

A solicitor can advise you on the best way to leave a gift to a charity. There are different implications for leaving either fixed sums of money, specific assets or a share of your estate and the procedures after your death and any costs associated with administering them will be different. So it is important that you take professional advice. The solicitor can also advise you on the IHT implications of leaving a gift to charity.

For more information contact Christine Butterfield on christine.butterfield@battens.co.uk or call 01305 216205. See our Wills and Trusts services here.

If you would like to make a donation, leave a legacy to the Battens Charitable Trust or apply for a grant, please contact the Trust team by emailing: bct@battens.co.uk or by calling 01935 811304.