More people are leaving donations to charity in their Will
Posted on 12th May 2022
More than one in five wills now include a donation to charity according to a recent survey carried out by Remember A Charity.
Seven out of 10 solicitors and Will-writers say they make people aware of the Inheritance Tax (IHT) benefits of leaving a gift to charity in their Will. That’s an increase from six out of 10 in 2013.
Often, the option of charitable donations is raised at an early stage, but one in 10 still say they never mention it to clients.
Gifts in Wills are the largest single source of voluntary income for charities in the UK, raising £3.4billion annually to fund many charitable services.
In the UK, tax relief makes charitable gifts in Wills one of the most efficient ways of donating because they are exempt from the 40% IHT for estates that are above the nil rate thresholds. When the donation amounts to 10% or more of the value of an estate, IHT on the remaining inheritance reduces to 36%.
Almost a third of UK donors aged over 40 say they have or intend to include a gift to charity in their Will.
Making a difference
The number and value of donations is expected to increase in coming years. The average annual contribution of charitable gifts in Wills in the UK is predicted to rise by 26% over the next five years, reaching £4.4billion per year by 2026.
Charity income dropped by 11% in 2020 due to the financial hardship caused by the pandemic, the cancellation of many fundraising activities, and delays in estate administration processes such as the registration of deaths, estate valuations, and IHT assessments. There could be between 30,000 and 40,000 bequests still in the system which will help charities to improve their financial positions this year.
Future increases in charitable donations have been calculated based on legacy trends and predicted deaths, anticipating an average of 134,000 to 137,000 bequests per year until 2026. The forecast is for the average value of these bequests, which is expected to rise by 13% each year as the value of property and the size of people’s estates increases.
New demands on charitable giving include environmental issues and the urgent needs of people escaping from Ukraine. It will be important for people considering leaving gifts to charities to make choices based on the long-term impact they would like to make with their donation.
If you would like to update your Will or write a new Will that includes a charitable donation please get in touch.
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