CHARITABLE LEGACIES EXPECTED TO RISE
Released On 6th Apr 2022
The charity sector has been hit hard by the pandemic, with 91 per cent of charities in England and Wales experiencing a negative impact from past two years, according to data from the Government.
However, despite the cost-of-living crisis, the sector may benefit from an expected increase in charity legacies in the coming years.
Charity legacies, which refers to when individuals leave a gift in their Will to a charity, could reach up to £4.2 billion per year by 2026, reveals data from Legacy Foresight.
This expected increase amounts to the average income from charitable gifts rising by 26 per cent.
The number of expected deaths in the forthcoming years is a contributory factor to this prediction, with the death figure in 2021 being 10 per cent higher than pre-pandemic rates, which is expected to continue this year.
How do you leave gifts to charity?
In order to leave a gift to a charity (which could include cash, assets, or a proportion of the estate), the charity name can either be specified in the Will, or the trustees can decide who the beneficiary should be.
Whilst leaving a gift to charity yields benefits of contributing to a worthy cause, it may also be accompanied by tax relief for those inheriting the estate.
If the donation amount is equivalent to 10 per cent or more of the estate amount, the Inheritance Tax rate can be reduced.
Alternatively, the amount given to charity will be removed from the estate’s value prior to calculating the level of Inheritance Tax owed, thereby reducing the tax.
For help and advice with related matters, please in touch with our charity finance team today.
