The monetary value of gifts being left to charities from people’s estates has increased 30% in the last year, according to research.
YouGov polled more than 30,000 adults on behalf of Co-op Legal Services and found that cancer charities attracted the most charity donations, with gifts being the biggest source of income for Cancer Research UK. Bequests to animal charities, such as the RSPCA, proved the second most popular, followed by poverty and homelessness groups and local causes as the third and fourth most popular respectively. Gifting to charity can be a tax-efficient estate planning strategy for people to consider as it is usually exempt from inheritance tax. Inheritance tax is calculated by working out an estate’s entire value, including any overseas assets, and then levying 40% tax on estates worth more than £325,000 in 2018/19. However, if an individual was to leave at least 10% of their net estate to charity, inheritance tax would fall to 36% on the remainder of the estate. Gifts range from a fixed amount of money, a specific item or what is left after other gifts have been made from an estate.
However, anyone considering going down this route needs to ensure they are giving to a qualifying charity. This can be confirmed by asking the charity for their tax-exempt reference number. Rob Cope, director of Remember a Charity, said: “Gifts in wills, whether financial or not, are the lifeblood of so many vital services that are provided by charities all over the UK. “If everyone left just a small amount to good causes once they’ve taken care of loved ones, it could make an enormous difference for future generations.”
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