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Not only does a legacy gift benefit the foundation, but there are benefits to the person who is leaving the gift.
As well as the gift itself being tax-free, charitable gifts can also reduce the amount of inheritance tax that the rest of your estate will pay. If you give at least 10% of your taxable estate to charity, the inheritance tax rate for the rest of your estate drops from 40% to 36%.
1. A specific gift. This could be a small item, like a piece of jewellery, or it can be large, like a house or piece of land.
BENEFIT TO YOU: By leaving a specific gift to a charity in a will, the value of the item will not form part of the your estate, for Inheritance Tax purposes. *
2. A pecuniary gift This is a gift of money.
BENEFIT TO YOU: As with a specific gift, by leaving a pecuniary gift, the value of the gift will not form part of the your estate, for Inheritance Tax purposes. *
3. Residuary gift The residue of an estate is the balance of your estate after the legacies, debts and expenses, such as the funeral costs, have been settled. Often the biggest part of an estate, you can leave a percentage to charity – or the full residue. – If you leave the full residue of your estate to charity then, as long as the legacies do not exceed the inheritance tax allowance, the estate will be exempt from inheritance tax. If a you leave a percentage of the estate to charity, then this percentage will be exempt. – If you leave a minimum of 10% of your chargeable estate to charity, this will have the effect of reducing the inheritance tax charge from 40% to 36%.