MyLastWill Blog

Leave a Legacy in Your Will and Help a Charity whilst Reducing your IHT!

IHT (Inheritance Tax) thresholds have been frozen until 2030 and from April 2027, pension wealth will be drawn into IHT. This means that taxable estates are likely to double. Given this, it pays to do some effective estate planning and to consider ways of reducing your potential IHT liability. Leaving a charity a legacy is certainly one consideration. The ‘Office for Budget Responsibility,’ is a public body funded by the UK Treasury that provides independent economic forecasts. They have predicted that, with the proposed forthcoming (April 2027) change to IHT - where pension wealth becomes part of a deceased persons estate, taxable estates will rise from todays 5.2% to 9.5% by 2030. With IHT at 40% this will be a huge concern for many. In the UK, charitable donations are exempt from IHT and if you leave 10% or more of your estate to charity, the IHT rate is reduced from 40 to 36%! For many, legacy giving is much more than a way to reduce IHT; it’s a chance to make a lasting impact after death. Leaving a charitable legacy will be of particular interest to those with longstanding ties to good causes. You can choose almost any registered charity - from well-known organisations like the British Red Cross, Oxfam and Cancer Research UK to smaller, local causes. To help you choose a charity, you need to:

1. Identify your personal passions – Think about the causes you care deeply about. There’s nothing to stop you choosing multiple causes / charities.
2. Research your charities of interest – Take a look at their websites; in particularly their ‘Gifts in Wills or Legacies’ section. Obviously, check their registration.

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