If you have ever considered leaving money to charity in your will then you are not alone. New research by Smee & Ford has revealed that some 15% of wills include a charitable bequest and that this figure is on the rise. Given the time taken to finalise probate, figures for 2015 not yet available; however the research did reveal that in 2014 some £2.2 billion was left to charity, a rise of 8% on the previous year.
Those considering leaving a legacy donation may not be aware that such sums are deducted from the estate before the calculation of inheritance tax. In addition if more than 10% of the estate is left to charity then not only is the bequest deducted before inheritance tax is calculated, the remainder of the estate is also subject to a reduced inheritance tax rate.
This means that potential charity bequests should be taken into consideration when looking at inheritance tax planning. However, if the sole consideration is to make a donation to charity and the donor is a taxpayer, it may be more beneficial to simply gift aid a donation rather than leaving it as a bequest in your will.
If you would like to speak to a tax adviser about inheritance tax planning and the implications of charity bequests, please contact Newshams Tax Advisers on 0800 211 8657 or email us at firstname.lastname@example.org.