Many companies across the world have been severely affected by the coronavirus pandemic, due to its impact on the economy and society, in general, and charities are no exception.
With lockdown and social distancing restrictions and fundraising and events being cancelled or postponed since March, these problems have had a severe financial impact on charities. The National Trust, for example, has identified a shortfall of £200 million this year due to their sites having to close due to lockdown restrictions. Age UK is reporting a £42 million loss of income, and Cancer Research UK has warned it will lose about £120 million in donated income over the next 12 months.
Most people are likely to want to give something to their preferred charity, however, they may not have the capital to do so right now, or generally, during their lifetime.
Leaving a charitable gift in a Will
One way to ensure a charity is provided for is to leave a gift in your Will.
This can be done by leaving a set cash amount, a property or specific asset or a share of your residuary estate to a charity named in your Will (including the registered charity number), or by letting your trustees decide who will benefit from your estate.
If you choose to leave a gift to a specific charity in your Will, you can also discuss with the charity how your gift should be used (including these agreed instructions in your Will).
Tax benefits of leaving a charitable gift in your Will
Leaving a charitable gift in your Will could also have significant tax benefits, as any gift left to a charity is exempt from inheritance tax.
If your estate is subject to the payment of inheritance tax, the tax due is 40%, however, if you leave more than 10% of your estate to a charity through your Will, that inheritance tax figure is reduced from 40% to 36%.
How we can help
Davina Charlton is an Associate in our expert Wills, Trusts & Probate team.
At Nelsons, we can assist in the preparation of your Will and advise you on the most tax efficient way to leave your estate. For further information, please contact Davina or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.