The benefits of including a charitable donation in Essex in your will

The making of a Charitable Donation in Essex in your will could be beneficial for you for a whole variety of reasons. With this in mind, it is important to consider the benefits of including a A charitable donation in your will. Laura Richardson now takes you through why making a charitable donation in Essex in your will could be a good thing not only for the charity you elect to help but also for the level of inheritance tax that may be payable.

So many of us are aided throughout our lifetime by charities and yet very few people remember a charity in their will. Charities cover a vast range of causes and areas, some local to Braintree, some covering wider areas such as Essex or nationwide across the UK. It may be that a family member, or a friend has benefited from a charity and you wish to include a charitable gift for this reason. Whatever your reason, a gift to charity is one way to ensure you help to make a positive difference after your death.

Including a charitable donation in your will can also affect the amount of Inheritance Tax that the estate pays after your death. Inheritance Tax is a tax on the estate of someone who has died. Inheritance Tax does not apply if either, the value of your estate is below the £325,000 threshold, or if you leave the entirety of your estate to your spouse or civil partner, a charity or a community amateur sports club.

The Inheritance Tax rules were favourably amended on 6^th April 2017, giving a higher threshold of £425,000 providing that you leave your home to your children, step-children, foster children, adopted children or grandchildren. However, even with this change, there may still be a large figure to pay in Inheritance Tax! The standard rate of Inheritance Tax is 40%. As an example, if your estate is worth £600,000 and you gift your home to your children, this allows for a tax free threshold of £425,000. Therefore the Inheritance Tax due on the estate will be 40% of £175,000!

If you leave at least 10% of the net value of your estate to a charity, the estate can pay a reduced rate of Inheritance Tax of 36% on certain assets. We at Andrew Douglas Wills and Legal Services can quickly and simply guide you on how to minimise the Inheritance Tax payable in this way. It should be noted that in order for this reduced rate to be applied, the charity must be officially registered. Each registered charity has a registered charity number. These, along with information about all registered charities can be found on the Charity Register at https://www.gov.uk/find-charity-information.

If you are considering making a charitable donation in Essex, we at Andrew Douglas Wills and Legal Services would be happy to advise you on creating a new Will, or amending an existing Will in order to include your chosen charity, and demonstrating how this could affect the amount of Inheritance Tax due from the estate.

If you would like to keep up with our latest posts and advice about estate planning through the regular advice that we provide to our clients in this regard, then please also feel free to –

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