Leaving a gift in your Will lets you support causes that matter to you after your death. Gifts to qualifying charities are generally free of inheritance tax. In some estates they can also reduce the rate of tax on the rest. This guide explains the types of charitable gift and how to check and choose a charity. It also explains how to word the gift so it reaches the organisation you mean.
What is willanthropy?
Willanthropy is more than a clever play on words. It describes the choice to remember a charity alongside your family and friends when you plan your estate.
Many people assume only the wealthy leave gifts to charity. In fact, gifts of any size help. Many charities rely on gifts in Wills for a large part of their income, because these gifts help them plan ahead with more confidence. So your gift could support research, local services or the environment long after your lifetime.
Understanding Different Types of Charitable Gifts in Your Will
Pecuniary (fixed-sum) gifts leave a set sum, for example £5,000 to a local hospice. They give certainty, but inflation can erode their value. Also, if your estate shrinks, a large fixed gift can take a bigger share than you intended.
Percentage gifts leave a share of your residuary estate, for example 10%. The gift rises and falls with the value of your estate, so it stays in proportion to what you leave.
Residuary gifts leave all or part of what remains after debts, expenses and other gifts. Many charities particularly value residuary gifts. If you have no close family you wish to provide for, you might leave all or part of your residuary estate to charity. The charity’s share is generally exempt from inheritance tax.
Conditional vs Unconditional Charitable Gifts
A conditional gift depends on something being true at your death. For example, a gift to a named animal charity “provided it still runs its local rehoming centre”. Conditions let you target your gift, but they can cause the gift to fail if circumstances change.
An unconditional gift lets the charity use the money where it is most needed. It is usually simpler and less likely to fail. If you have a preference about how the charity uses the gift, you can express it as a wish rather than a condition. People often do this in a separate letter of wishes.
How to Choose a Charity: Checking Registration
Most charities in England and Wales with an income over £5,000 must register with the Charity Commission. You can search the register of charities by name, number or area of work. Each entry shows the charity’s purposes, income and spending, trustees and whether its annual returns are up to date. However, some smaller charities do not have to register. So if one you like is not listed, ask it about its status.
Several charities may work in the same field with very similar names. For this reason, your Will should give the charity’s full registered name, address and charity number. Also look more closely if a charity’s returns are overdue or the register shows regulatory action. The same applies if it has changed its name or purposes without a clear reason.
Evaluating Charity Financial Health and Effectiveness
A charity’s annual report and accounts are the best starting point. Charities with several funding sources tend to be more resilient than those relying on one. Look at how much goes on charitable activities compared with fundraising and administration. However, bear in mind that some work genuinely needs more infrastructure.
A charity may not receive a legacy gift for many years. So reserves, clear plans and stable funding are all good signs, particularly for small or new charities.
Aligning Your Values with Charity Mission and Impact
Start by deciding what you want your gift to achieve, whether that is direct services, research, campaigning or education. Then look at how each charity reports its impact: specific figures and examples are more useful than general statements. Charities working on the same issue can take very different approaches. So choose a charity whose approach matches your own view.
Inheritance Tax and Charitable Gifts
Gifts to qualifying charities, whether made in your lifetime or in your Will, are generally exempt from inheritance tax. However, the exemption generally applies only to UK charities and certain other qualifying bodies. So a gift to an overseas charity may not qualify.
There is also a reduced rate. If 10% or more of the “baseline amount” of your estate goes to charity, the rate on the rest of the taxable estate may fall from 40% to 36%. The baseline amount is not simply 10% of everything you own. Broadly, it is the part of the estate above the available nil-rate band, after other exemptions and reliefs. The charitable gift is then added back. HMRC does not deduct the residence nil-rate band when working it out. Also, the calculation can apply separately to different parts of an estate. GOV.UK explains the rules on gifts to charity and inheritance tax.
Whether the reduced rate makes any difference depends on the size and make-up of your estate. Gifts between spouses and civil partners are usually exempt too. This can affect whether a couple makes a charitable gift on the first death or the second.
A.D.E. Wills drafts the charitable gift clauses in your Will. If you want one, this can include a gift worded by reference to the reduced rate. We do not give tax advice. For advice on the tax effect of your plans, we can refer you to an appropriate professional, such as an accountant or financial adviser.
Comparing Local, National and International Charity Options
Local charities often give direct, visible benefits to your community, but some may be more vulnerable to closure. National charities usually have stronger infrastructure and legacy teams, though your gift may feel less personal. Many UK-registered charities fund work overseas through partner organisations. If you want to support international work, a UK-registered charity of this kind may be simpler for your executors. It is also more likely to fall within the inheritance tax exemption than a charity based abroad.
Future-Proofing Your Charitable Bequest
Charities close, merge and change names over time. If a charity has merged into another, the gift may pass to the new charity. That depends on the wording of your Will and the circumstances. However, if the charity ceased to exist before your death, the gift may fail and fall back into your residuary estate. Your gift only goes to similar purposes, under what is called a cy-près scheme, if the Will shows a general charitable intention. That can involve the Charity Commission or the court and may delay matters.
Good drafting reduces this risk. For example, your Will can say the gift goes to any charity that has taken over the named charity’s work. Alternatively, it can name a back-up, or let your executors choose a charity with similar purposes.
Review your charitable gifts whenever you review your Will, checking the charity’s details are still current.
Building Relationships with Charities During Your Lifetime
Donating or volunteering gives you first-hand experience of how a charity works. If you want the charity to use your gift for a particular project, ask first whether it can accept that. You do not have to tell a charity about your plans or say how much you intend to leave.
Common Charitable Giving Mistakes to Avoid
- Vague descriptions such as “cancer research” or “a local animal charity”, which can cause delay or dispute.
- Out-of-date names, addresses or charity numbers.
- No fallback wording if the charity merges or closes.
- Conditions or restrictions that are too narrow for the charity to meet.
Balancing Charitable and Family Interests
You are free to leave your estate as you choose. However, certain people, such as a spouse, child or financial dependant, can claim under the Inheritance (Provision for Family and Dependants) Act 1975. They may do so if your Will does not make reasonable financial provision for them. So if you leave a large share to charity, it can help to record your reasons and talk to your family.
Remember A Charity
A.D.E. Wills is a supporter of Remember A Charity, a campaign that encourages people to consider leaving a gift to charity in their Will. So when we take instructions for a Will, we will ask whether you would like to include a charity. There is never any pressure, and the choice is entirely yours.
Writing Your Charitable Gifts with A.D.E. Wills
A.D.E. Wills is a small practice run by Edward Richings, a Full Member of the Society of Will Writers. We also support the Remember A Charity campaign. Once you choose a charity, we can help you set out your gift clearly, with the correct charity details and fallback wording. We can also prepare a letter of wishes explaining how you hope the charity will use the gift. Every In-Person and Online Will we write comes with a personalised booklet explaining your draft Will clause by clause. We offer our Wills at a fixed fee, shown on our Wills Pricing page.
Frequently Asked Questions
How much should I leave to charity in my Will?
There is no right amount. It depends on your circumstances, your family and what you want to achieve. Some people aim for 10% or more of the baseline amount because of the reduced rate. However, whether that helps depends on your estate.
Can I change my mind about charitable gifts after making my Will?
Yes, by having your Will updated or making a new Will, signed and witnessed in the same way as your original. Crossing out words after signing does not change the gift.
To talk about including a charitable gift in your Will, call 01865 507174 or email info@adewills.co.uk. You can read more about our Will writing service before you get in touch.
