Making a legacy gift to Orphaids
It is undeniably beneficial to Orphaids when you leave a gift to us in your Will. However, making a legacy donation to charity can also help you keep your Inheritance Tax liability as low as possible.
Here we outline the process so you can consider if this is something you’d like to do…
What is a legacy gift?
A legacy is a gift left in a person’s Will to provide support for an individual or to an organisation after the person’s death. It is a way a gift can be used to express generosity at a level which may not have been possible earlier in one’s life. It is also a way by which a person, who has given a proportion of their income to a particular cause during their life, can arrange to do so with their capital after their death.
In summary, the types of gift options available could be a fixed amount of money, a percentage of the estate, or an item or items. These are described as:
Pecuniary gifts – specified sums of money. If you would like a gift of money to keep its value over the years, it is a sensible idea to ask your solicitor to index-link it in your Will.
Residuary gifts – a percentage of the estate made from whatever is left over once gifts of money and specific items have been distributed. You can give the whole of the residue to a person or a charity, or a portion of it spread amongst different beneficiaries.
Specific gifts – things, such as a painting, a house or a ring.
Will a gift to charity reduce my Inheritance Tax bill?
In short, yes. Any gifts you make to a charity will be exempt from Inheritance Tax. In some instances, this can have a beneficial effect on the overall amount of tax paid on your whole estate. Your legal or financial advisor will be able to advise you specifically on this issue.
Guidance can be obtained from HMRC at the gov.uk website on the reduced rate of Inheritance Tax for estates leaving a ten percent bequest to registered charities. This is to encourage people to leave part of their estate to charity – so where at least 10% of a person’s net estate is left to charity, the rate of tax charged on the remainder is reduced from 40% to 36%.
Is it easy to leave a gift to Orphaids?
The process is simple. When you make or amend your Will you would include the type and amount of the gift, plus what it would be used for if so desired. Examples might be:
Subject to the payment of my debts and funeral expenses, I give XX% of my estate not otherwise disposed of by my Will to Orphaids UK (Charity Number 1081104).
I leave £XXXXXX to Orphaids UK (Charity Number 1081104).