Leaving a legacy: Why gifts to charity make a difference

During Remember A Charity week, professional advisers, wealth planners and charities come together to raise awareness of leaving gifts to charities in wills.

Eleanor Evans, Partner and Head of our Trusts and Estates Administration team, highlights the benefits of legacies and addresses some common myths that arise when talking about charitable giving.

The importance of legacies to charity

In 2024, £4.5billion was left to charities in wills, with around 16.6% of deceased estates including a charitable legacy. This source of income is vital for charities to continue their work.

By leaving a legacy in your will, however small, you can make a lasting contribution to specific causes that are meaningful to you. A legacy may represent your thanks to a charity that has helped you or a loved one, or the continuation of your support to a charity you have had an affiliation with throughout your life. Donating to charity helps promote a sense of wellbeing and is an intrinsic part of many faith traditions. It can also be a way to ensure your memory, or the memory of a loved one, lives on.

The range of charities you can choose to support is huge. Common causes furthered by charitable organisations include: health, disabilities and social care, animal welfare, the armed forces, the arts, faith and religion, children, international aid, and the environment.

Common misconceptions about legacy giving

Myth 1: Only large donations matter

You do not need to leave a large amount to charity for the gift to make a difference. You should only give what you feel you are able to afford after taking care of your loved ones in your will. Charities will be grateful for any amount you are able to pass on to them in your will.

Myth 2: It’s not tax efficient

Charities do not pay tax, and any legacies left to charities registered in England and Wales will be free of tax for the person giving the legacy. If the value of your estate means it will be liable for inheritance tax, then you may be able to reduce the tax on your estate by leaving gifts to charity.

The rules relating to inheritance tax are complicated and will become more so in the next couple of years following recent changes introduced by the current government. Broadly speaking, inheritance tax is payable at a rate of 40% on the value of your estate that exceeds the available nil rate band. The current single nil rate band is £325,000 but there is also a residence nil rate band of £175,000 available in specific circumstances, and it can be possible to transfer unused nil rate bands between spouses/civil partners.

A reduced inheritance tax rate of 36% is available if you leave 10% of your net residuary estate to charity. This can mean significant tax savings in more valuable estates – in some cases, even increasing the amount of the estate that is available to pass on to family members. Professional advice should be taken to ensure your will is properly drafted to take advantage of the reduced rate.

Myth 3: Family will contest the gift

In England and Wales, there is “testamentary freedom”, which means you can leave your estate to whomever you wish, including charities. There are limited grounds upon which family members can bring claims or challenges after someone dies – for example, on the basis that the person making the will did not have capacity to do so or that they did not provide for someone who was financially dependent on them. In general, however, the courts will seek to uphold the wishes of the person who had made the will.

Research by Remember A Charity says that 38% of professional advisers believe the risk of family dispute is a barrier to charitable legacy giving in wills – so whilst there is some concern about this, it does not arise in most cases. Advice from an experienced solicitor or adviser is likely to help in alleviating this type of concern when it arises.

Many people choose to leave a relatively modest sum of money or share of their estate to charity, and our experience is that this does not typically cause any problems with family members. Legacies are often left to causes individuals had supported throughout their lives, or to which they had some personal connection, and so will come as no surprise to relatives. In some cases, people discuss their plans to leave a charitable legacy with their family when they make their will, although there is no obligation to do so. Families are often supportive of the legacy as they appreciate the lasting contribution that comes about as a result of their relative’s decision.

If you would like to leave a charitable legacy but have concerns that your family might want to challenge it, then your solicitor or adviser can provide advice on how best to achieve what you would like to happen, and how to minimise the risk of a potential challenge.

How to leave a legacy to charity in your will

If you would like to leave a gift to charity in your will, you should consider the following:

• Think about causes that are important to you, and any particular charities you wish to benefit. Remember A Charity has a helpful “Find a Charity” tool, if you are not sure which charity to name.
• If there are specific charities you would like to leave a legacy to, it is important that their correct name, registered address and registered charity number are included in your will. You can check these on the Charity Commission’s website or using the Find a Charity tool.
• Consider any specific wishes you would like to include in relation to your legacy. Would you wish the money to be used towards a particular project the charity is involved in, or in a specific geographical area, for example? You should be aware that it is not always possible for charities to follow wishes such as this, but sometimes they will be able to – your solicitor or adviser will be able to discuss this with you.
• Think about whether you would like to leave a specific sum of money (a “pecuniary legacy”), or a percentage share of your estate (a “residuary gift”) to charity. Again, your solicitor or adviser can explain the advantages of each option.
• It is recommended that you take professional advice from a solicitor or other qualified professional in relation to your will. This will ensure your will is correctly drafted in accordance with your wishes and that you receive appropriate advice regarding any other considerations that affect you, such as inheritance tax, and concerns about challenges to your will.

For more information

Remember A Charity is a consortium of around 200 charities, working together to encourage legacy giving. If you would like more information about the important work they do, please visit Remember A Charity’s website.