Leaving gifts to charity in a will

What charities can be supported?

Many people like to use their will to support a charitable cause. Legacy gifts often make up a large proportion of a charity's funding and play a significant part in the work that they do.

There are well over 150,000 registered charities in the UK, ranging from the very large, well-known charities to those which may be very small or local. Many charities do not receive any government or lottery funding and about 40% of them have an annual income of less than £10,000. This means that they rely on donations (whether they are lifetime gifts or ones left in wills) to keep going. 

A gift to charity in your will could save a life, help children, young people or those with terminal illnesses or enable a disabled person to retain their independence. Legacies also often provide the vital funds needed to undertake long-term research or to pioneer new projects. Many larger charities have specific legacy teams who will be able to tell you how your legacy will make a difference.

No legacy is too small; every penny counts!

You may have your own favourite cause which you might wish to remember in your will. People frequently choose to support:

  • a cause or institution with which they have been associated during their lifetime – such as a school, college or religious organisation;
  • a medical or care institution – such as a hospital or hospice;
  • charities funding medical research or care;
  • children’s charities;
  • charities dealing with homelessness or poverty;
  • overseas humanitarian work; or
  • animal charities. 

And, of course, many people choose to support more than one.

If you die intestate (i.e. without a will), no donation is made to charity.

How to support charity in the will?

You can use your will to support a charity by including various kinds of provision, such as any or all of the following:

  • requesting donations to charity to be sent in lieu of flowers;
  • making specific gifts of cash to charity;
  • directing that personal possessions be given to charity;
  • giving a percentage of your net estate to charity.

Your net estate is what is left after liabilities, debts and funeral expenses have been deducted and specific legacies have been distributed, but before inheritance tax exemptions. It is not a specific sum..

Charities sometimes cease to exist, or merge with each other to form new charities. You can specify whether your gift:

  • is to go a specific charity, and no other;
  • is to go to a specific charity, or an alternative specific one if the first is not in existence;
  • can go to one which has taken over the named charity; or
  • can go to a charity with similar objects chosen by the executors or trustees.

You might choose the third or fourth of these options to ensure that a charitable donation of some sort is made.

It is generally a good idea, when considering gifts to charity, to make sure that the intended recipient is registered with the Charity Commission. Not only does this mean that it has been validated as a charity, but also that the possible tax advantages of charitable bequests can be utilised.

Any gift you make to charity in your will can be index-linked. This means that it will change between when your will is written and when you die by the same amount as the general level of prices. For example, if you had left an index-linked gift of £1,000 to a charity in a will written in 2000, the charity would receive approximately £1,550 today. But if the level of prices increases dramatically by the time you die, any index-linked gift to charity could end up being much more than you intended to give and reduce the amount that is left to distribute to the principal beneficiaries of your estate.

Tax advantages

There are significant tax implications of making gifts to charity in a will:

  • gifts to charity are exempt from inheritance tax (IHT); and
  • if 10% or more of your net estate is left to charity, then the IHT chargeable on the remainder of the estate is reduced from 40% to 36%.

For more information, please see our page Donate to a charity in your will to make use of charity tax exemptions.

Leaving the whole estate to charity

It is a common misunderstanding to think that you can always leave your entire property in any way that you choose. And that includes leaving it all to charity.

Even when the cause is good, if there is a close family member or dependant who feels that they should have been provided for by your will, they may have a claim against your estate for reasonable provision. It has been held in court that there would have to be very strong reasons for leaving the estate to a charity rather than such a person. One contributing factor might be that you have had a strong history of supporting the charity. For more information, see Can you disinherit family and dependants?