Thu 11 Mar 2021

Have you considered your charitable legacy?

While a recession tends to hit charitable giving hard, the Covid pandemic has heightened our awareness of the benefits of charitable giving. Indeed, in the first six months of 2020 the British public increased their charitable giving by £800 million year on year.

Scots-American philanthropist Andrew Carnegie’s philosophy of giving was underpinned by the belief that with wealth comes responsibility. To address society’s greatest challenges; to do “real and permanent good in the world.”

It is natural for those with means to think carefully about what they can do to help, and what kind of legacy they can forge for the future.

Once the national crisis becomes a manageable part of our lives, thought must turn to how to evolve your approach. Many react to crises but fewer proactively plan to give.

Charitable legacies are the largest single source of voluntary donations and have a huge impact on charities’ ability to deliver frontline services. But philanthropy need not only be posthumous.

Many of us feel that leaving your mark on society is not just for those with great wealth. However, the implications of giving are often misunderstood. This is particularly important with estate planning and inheritance.

Leaving a part or your entire estate to charity can reduce, and in some situations eliminate, your inheritance tax liability. To put it bluntly, one way to reduce the amount that the taxman takes from an estate in inheritance tax is to donate to charity. The donation is taken off an estate before inheritance tax is calculated. If that donation is large enough (at least 10% of the net estate), the rate at which inheritance tax is levied on the remainder of the estate is reduced.

Consider what you can afford to give and start a plan to give that money proactively and purposefully. Thinking about your contribution to society is the perfect framework for looking at your wider financial position, to ensure as much money as possible ends up supporting those who need it most.

Should you wish to speak with us, please don't hesitate to contact our team.

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