In 2018, £3 billion was left to over 10,000 different charities in Wills. Smaller charities are increasingly popular, possibly following some high profile failures by bigger organisations.
An estimated 6 percent of charity income in the UK is derived from gifts in Wills, with public generosity growing over the past few years.
Inheritance Tax can be payable at the rate of 40 percent on the value of an estate over £325,000. The exact calculations can be complicated, so it is recommended to seek professional advice if your estate is likely to exceed this amount.
If you leave 10 percent or more of the part of your estate on which Inheritance Tax is payable to a registered charity, then the Inheritance Tax rate can be reduced to 36 percent. If you wish to try and mitigate the amount of Inheritance Tax your estate will need to pay, you should speak to an expert, as it is not always a straightforward calculation.
According to Legacy Market Outlook, the most popular charitable area for giving is health, at 38 percent of the total, according to their 2018 report. Animal charities followed at 15 percent, then conservation and disability at 8 percent each. International development received 7 percent.
Charities receiving the most by way of bequeaths include Cancer Research UK, the Royal National Lifeboat Institute, Macmillan Cancer Support, the British Heart Foundation, the Royal Society for the Prevention of Cruelty to Animals, the Salvation Army Trust, The National Trust, the People’s Dispensary for Sick Animals, and the Guide Dogs for the Blind Association.
To benefit from the Inheritance Tax exemption, the charity you choose should be based in the UK or EU and have a registered charity number.
A charity may have helped you or your family at a difficult time or be a cause close to your heart.
Quite often, medical charities are chosen when a relative has suffered from the particular disease they are set up to try and help with.
Local charities are also popular, with smaller organisations increasingly benefiting in Wills.
You can either leave the charity a specified lump sum, or alternatively a percentage of your net estate.