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Frequently Asked Questions

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InHouse Wills & Probate

Award-winning Will writer

Charity Legacies

 

Support your favourite charity - and it is free of Inheritance Tax

Charity Legacies

 

Many of us like to support the work of one or two charities - perhaps organisations that reflect our own interests, or ones that have been of particular help to family and friends. All gifts to charity are free of Inheritance Tax (IHT) and so they can reduce the tax payable on our estate.

Charities need all forms of support - from regular giving through to large one-off donations. A gift from a Will can make a big difference, especially to small local charities. However, surveys suggest that nationally only 7% of Wills include a charity.

 

If you are not sure which charity to support, we can make some suggestions of local charities

 

Currently InHouse is particularly keen to support Bamboozle Theatre Company based in Leicester.

IHT and Charity: Nowadays there is a 10% reduction in the IHT bill for an estate, provided at least 10% of the net estate goes to charity.

Example: Suppose the estate of a single person (after payment of all debts etc) is £400K. That would mean £75K would be subject to IHT at 40%. That creates a tax bill of £30K leaving £370K to pass on to beneficiaries.

But if at least £7.5K goes to charity (free of IHT), then tax bill is reduced:-

(75-7.5) * 36% = £24.3K.

Thus charity receive £7.5K, £24.3K of tax is paid on the remainder meaning the other beneficiaries share £368.2K

Remember - all gifts to charity from your Will are free of Inheritance Tax, avoiding the 40% tax.