-
Why the wording of a Will matters
Leaving a gift to charity in your Will can seem straightforward, but it is worth getting the wording right. A Will should clearly identify the charity, the type of gift and what should happen if the charity has changed its name, merged with another organisation or no longer exists when the person dies.
A charitable gift might be:
- a fixed sum of money
- a percentage of the estate
- a specific asset
- the remainder of the estate after other gifts have been made
When the reduced inheritance tax rate is part of the planning, a minor wording issue can cause problems. For example, the gift may not meet the 10% requirement, the calculation may not work as expected, or executors may be left unsure how to apply the gift.
A properly drafted Will can help avoid uncertainty and ensure the charity, family members and executors understand what should happen.
HMRC charity tax relief statistics show that, in the tax year to April 2026, the estimated inheritance tax relief for charitable donations was £1.28 billion.
For many people, leaving money to charity is about supporting a cause that has meant something to them or their family. It may be a local charity, a medical cause, an animal charity, a faith organisation, a community group or another organisation close to their heart.
Charitable gifts can also form part of wider estate planning. Where inheritance tax may be payable, a carefully drafted charitable gift can reduce the tax due while still allowing the person making the Will to provide for family members and other beneficiaries.
How can leaving money to charity reduce inheritance tax?
Inheritance tax is usually charged at 40% on the value of an estate above the available tax-free thresholds.
Gifts left to qualifying charities are generally exempt from inheritance tax. The GOV.UK inheritance tax guidance explains that an estate may qualify for a reduced inheritance tax rate of 36% on some assets if 10% or more of the net value of the estate is left to charity.
This can be a useful relief, but the calculation is not always straightforward. The ‘net estate’ has a specific meaning for inheritance tax purposes, and the way a charitable gift is worded in the Will can affect whether the estate qualifies.
Anyone considering a charitable gift for inheritance tax reasons should take proper advice, so the gift reflects their wishes and works as intended.
-
Why pensions may need to be reviewed alongside Wills
From 6 April 2027, GOV.UK says most unused pension funds and pension death benefits will be brought within the value of a person’s estate for inheritance tax purposes. This could prompt more people to review their estate planning, particularly where pensions form a significant part of their overall wealth.
Pension nominations should be considered alongside the Will. They are not always treated the same way as assets passing under a Will, and the rules can depend on the type of pension scheme and how benefits are paid.
If someone wants to leave money to charity, provide for family members, and plan around pension death benefits, they should review the Will and pension nominations together. You may need both legal and financial advice.
-
Should charitable gifts be made during life or through a Will?
Some people choose to support charities during their lifetime. Others prefer to leave a gift in their Will to retain control of their assets, especially when considering future care costs, income needs or supporting family members. There is no single right answer.
A lifetime gift may allow someone to see the impact of their support, while a gift in a Will can allow them to provide for family first while still leaving a meaningful legacy to charity.
The right approach will depend on the person’s assets, family circumstances, tax position and wishes.
-
Avoiding disputes over charitable gifts
Charitable gifts can sometimes lead to disagreement after death. Disputes may arise if family members expected to inherit more, if a Will was changed late in life, if the person making the Will was vulnerable, or if the wording of the gift is unclear.
A solicitor-led Will can reduce that risk by ensuring the person’s wishes are properly recorded, the Will is valid, and any charitable gifts are clearly explained.
It is also important to be cautious about unregulated Will writing services and fake charity Will schemes. MoneyHelper warns that fraudsters may use fake charity Will schemes to pressure people into leaving money to a non-existent charity, steal personal or financial information, or charge hidden fees.
Many charities run genuine free Will schemes, but people should check directly with the charity and make sure they understand who is preparing the Will, whether the service is regulated and what protection is available if something goes wrong.
-
What should you think about before leaving money to charity?
Anyone considering a charitable gift in their Will should think about which charity they want to support, whether the gift should be a fixed amount or percentage, and how the gift may affect family members or other beneficiaries.
It is also sensible to check whether the estate may qualify for the reduced inheritance tax rate, whether pension nominations need updating, and whether any previous Will still reflects the person’s wishes.
The Will should also be reviewed after major life changes, such as marriage, divorce, bereavement, the birth of children or grandchildren, or a significant change in assets.
-
TLW Solicitors’ comment
“Leaving money to charity in a Will can be a very personal decision. For many people, it is about supporting a worthy cause, rather than simply reducing inheritance tax.
Charitable gifts can also form part of sensible estate planning, particularly where inheritance tax may be payable. The key is to draft the Will carefully, so the gift is clear, the right charity is identified, and the wider effect on the estate is properly understood.
With pension inheritance tax changes expected from April 2027, now is a good time to review Wills, pension nominations, and estate planning more generally. Good advice can help make sure charitable wishes, family
How TLW Solicitors can help
TLW Solicitors provides clear, solicitor-led advice on creating a Will, lifetime estate planning, trusts and probate and estate administration.
If you are considering leaving money to charity in your Will, reviewing your estate because of inheritance tax concerns, or updating your Will following a change in family or financial circumstances, we can help you understand your options and put clear arrangements in place.
