When making a will, your thoughts may naturally turn to how you will be remembered, not only by friends and family but in the wider community. Leaving a gift to a charity is one way many people try to make sure that some good for others may follow their departure.
Not everyone knows that the benefits also apply to a legacy to what the taxman calls a Community Amateur Sports Club (a ‘CASC’).
Rules on inheritance tax
For once, the rules are comparatively straightforward: the value of your gift will be deducted from your estate before inheritance tax is calculated.
Simply put, this means that if your estate is liable to IHT, the bill will be lower. Gifts made to a charity or a CASC in the seven years before your death also qualify for exemption.
Pecuniary legacy or residuary legacy
You can either give a specific sum, known as a ‘pecuniary legacy’ (from the Latin word pecunia meaning money) or part – or indeed all – of your estate once other specific gifts have been made, called a ‘residuary legacy’.
Choosing a charity
You may already be involved in one or more charity, whether national or local; you will be in a good position to know what needs it has. Or you might want to consider a particular charity that has been of assistance to you or to someone close, or that deals with a particular issue, perhaps scientific research.
Some people also leave money to a local church, or to a school or college they attended or have links to.
Informing the charity
If you are leaving substantial sums, you may want to tell the organisation that you are doing so in advance, as there may be further action it can take to make your legacy more effective; you may also want to request anonymity.
Although all wills are available to the public in due course, the organisation is under no obligation to trumpet the gift from the rooftop.
The information which we provide through Lasting Post is in outline for information or educational purposes only. The information is not a substitute for the professional judgment of a solicitor, accountant or other professional adviser. We cannot guarantee that information provided by Lasting Post will meet your individual needs, as this will very much depend on your individual circumstances. You should therefore use the information only as a starting point for your enquiries.