There was a 6.3% rise in legacy income for charities during the twelve months to March 2017, Remember A Charity reports.
Inheritance Tax Advantages
Charitable legacy income is money left to charities in wills by people who want to leave a gift to a cause close to their heart after they have passed away. Charitable legacies are an important source of income for charities, and the amount they receive has grown by 39% over the past five years to £2.5 billion.
However, charitable legacies are not just good news for the charities that are named as beneficiaries – there are tax advantages for the individual leaving the bequest as well. If you leave at least 10% of the net value of your estate to one or more charities it is possible to reduce the rate of inheritance tax payable on your estate from 40% to 36%.
According to Remember A Charity, 36,197 estates included a charitable legacy in 2016. This equates to around 6% of the population leaving a bequest in their will.
It’s not just the mainstream charities that can be the beneficiaries of charitable legacies. Popular charities such as health, children or animal related causes all receive their share of bequests in wills, but other people choose to leave a gift to less obvious charities, such as universities or other learning institutions.
Napier University Receives Large Bequest
Earlier this year, Napier University in Edinburgh reported that it had received the largest legacy gift in its history.
This legacy came courtesy of Ian Tomlin, who passed away in January last year. After his death it was revealed that he had left a legacy of £750,000 in his will to support the University’s classical music programme.
Mr Tomlin had apparently been a regular supporter of the university during his lifetime. Even after he retired and moved to live in Malta he continued his support by setting up the Malta/Napier Music Scholarship Trust, which helped music students from Malta go and study their subject in Edinburgh.
The generous legacy left in Mr Tomlin’s will is to be used to fund “the study, teaching and performance of classical music”.
“The training of these young people would not have been possible were it not for Ian’s extraordinary, selfless generosity,” commented Nicholas Ashton, Co-Programme Leader for BMus (Hons) at Edinburgh Napier.
“He was the epitome of the philanthropist, a man who was driven by the desire to promote the welfare of others, and we are delighted his influence will continue to be felt here as his legacy gift supports the careers of the promising classical musicians of the future,” he added.
Expert Legal Advice Recommended
Inheritance and inheritance tax planning can be complex issues and expert legal advice is always recommended. Consulting an experienced lawyers will mean you can be sure that your will is correctly written and will distribute your estate in accordance with your wishes and in the most tax efficient way possible.
If you would like to discuss inheritance planning, or find out more about writing or updating a will, then contact our specialist will writing lawyers today.