Leaving a Legacy
There are numerous ways in which you can help us and support the great work that Wimbledon Greyhound Welfare do. There is another way in which you can help us in the distant future by including a legacy in your will.
Did you know that leaving a part or your entire estate to charity can reduce, and in some situations, eliminate the Inheritance Tax liability.
If you leave something to charity in your will, then it won’t count towards the total taxable value of your estate. This is called leaving a ‘charitable legacy’.
You can also cut the Inheritance Tax rate on the rest of your estate from 40% to 36%, if you leave at least 10% of your ‘net estate’ to a charity.
To illustrate how this would work, let’s say that when you died:
- your net estate was worth £425,000
- in your will, you left it all to your partner who lives with you
- you have your full Inheritance Tax allowance (currently £325,000 for the 2018/19 tax year)
- you weren’t married or in a civil partnership (the spouse exemption is not available if you are not married)
- thus, the ‘net estate’ is £100,000 (i.e. £425,000 minus £325,000). And there is Inheritance Tax to pay on £100,000 at a rate of 40%
- so, your estate’s would have to pay a tax bill of £40,000 (i.e. 40% of £100,000).
But if you wanted to reduce the tax bill by making a charitable gift:
- you’d leave your partner £415,000, and
- £10,000 to charity in your will (which is 10% of your ‘net value’ of £100,000)
- the estate would then pay 36% on £90,000 worth of assets instead. This means that your estate would pay £32,400 in Inheritance Tax.
While this would mean your partner receives less when you die, in this example making a charitable legacy would shave off £7,600 from the Inheritance Tax bill.
This is worth considering if you’re keen to support a charity even after your death.
If you are intending to write or change you will, it is a good idea to get the advice of a solicitor or accountant who specialises in estate planning.