SEVEN OUT of ten peo­ple never make a will and, of those who do, only a small mi­nor­ity leave a le­gacy to char­ity, even though most have made char­i­ta­ble do­na­tions dur­ing their life­time. The fi­nan­cial con­se­quences of dy­ing with­out a will could be se­ri­ous. Your es­tate may be shared out ac­cord­ing to le­gal rules that do not re­flect your wishes. Thou­sands of pounds can be lost if a will is not prop­erly drawn up and validly wit­nessed. Most dis­putes about wills re­late to those made with­out the ben­e­fit of le­gal ad­vice.

Mak­ing a will with proper ad­vice and en­sur­ing it is re­viewed when­ever cir­cum­stances change guar­an­tees your cho­sen ben­e­fi­cia­ries will re­ceive what is prop­erly due to them.

With prop­erty prices, par­tic­u­larly in Lon­don, at record lev­els, in­her­i­tance tax is more of an is­sue to­day than ever be­fore. If you own a prop­erty in the cap­i­tal, the taxman will more than likely ben­e­fit from your es­tate at the ex­pense of your fam­ily and friends. Tax plan­ning and in­clud­ing a le­gacy to char­ity in your will could re­duce the amount go­ing to the taxman.

Against a back­ground of cuts in fund­ing to the char­i­ta­ble sec­tor, the Govern­ment is now en­cour­ag­ing char­i­ta­ble giv­ing through more — and higher-value — le­ga­cies. The Govern­ment is not only sup­port­ing the prin­ci­ple of giv­ing to char­ity by will, but pro­vid­ing a tan­gi­ble in­cen­tive to do so, through the re­duced tax rate on the re­main­der of the es­tate.

Not only will a char­ity be­quest re­duce your tax­able es­tate, but if its value ex­ceeds the crit­i­cal ten per cent thresh­old, the tax rate ap­plied on the re­main­der of your es­tate pass­ing to your fam­ily will re­duce from 40 per cent to 36. So the cost of a le­gacy to char­ity will now be borne by the Govern­ment in saved in­her­i­tance tax.

And if you have al­ready in­cluded char­ity le­ga­cies, but they fall just be­low the ten per cent thresh­old, in­creas­ing the le­ga­cies be­yond that tip­ping point could re­sult not only in a larger gift to the char­i­ties, but also an in­crease in the amount pass­ing to your fam­ily. That is be­cause the in­crease in the char­ity le­ga­cies trig­gers the lower rate of tax, so the cost of both comes wholly from the taxman.

This is a wel­come move by the Govern­ment. Never has the cli­mate for giv­ing to char­i­ties by le­gacy been so favourable.

The in­cen­tive in­tro­duced by this change does more than has ever been done be­fore to both ben­e­fit char­ity and at the same time min­imise the cost to your fam­ily of do­ing so.

For fur­ther ad­vice on wills and leav­ing a le­gacy to char­ity, con­tact Carolyn Addleman, di­rec­tor of le­ga­cies at JNF UK, 020 8732 6126, [email protected]

If your le­ga­cies to char­ity ex­ceed ten per cent of your es­tate’s net value, the Govern­ment will treat your rel­a­tives to a re­duced tax bill

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