This month, it is easy to focus on the spirit of giving.
The festive season is a time of giving and offers the opportunity to spend quality time with family. Reflecting on how much one has, leads to the inevitable realisation that others have so much less. Our team here at Baldwin and Robinson recognises how fortunate we are and celebrate this by making regular contributions to a variety of charities.
Already, this Christmas season alone, the firm has donated to Surrey Angels to assist the homeless, and the staff has donated to Crisis for Christmas. We have also all chipped in to make up a couple of ‘Christmas Shoeboxes’ for the Samaritans’ Operation Christmas Child.
We are not alone – in fact, 61% of people in the United Kingdom have reported donating to charity within the last year, with online giving becoming more common.
The need for charity
At the end of the year last year, over 4,000 people were estimated to be sleeping rough. 2017 is forecast to be one of the coldest years on record, putting many of these rough sleepers in danger. Surrey, our local area, is particularly deceptive, in that while it is one of the more affluent areas in the country, it still has pockets of extreme deprivation.
Some boroughs have up to 20% of its population living in poverty. Taking the time over the Christmas holidays to contribute to and alleviate these issues is extremely valuable to the recipients and important.
Charitable Gifts through Wills
Although the holiday season is a great time to give, there are other ways of contributing to society that are more permanent, and perhaps even beneficial to yourself and your family in the future.
If you decide to start planning your estate and drafting a will, it may be worthwhile considering a donation to charity.
Not only will a third party benefit from this gift, but your family could be relieved of some of the potential inheritance tax that may be owed on the estate. The donation will be taken off the value of your estate before inheritance tax is calculated, reducing the overall amount owed. If your gift is over 10% of your estate, then it will actually reduce the rate of your inheritance tax.
Currently the standard rate is set at 40%, but if you donate a sizeable portion of your estate to charity, this is reduced to 36%. The donation can be either a fixed amount, an actual item, or the residue of your estate (meaning whatever is left after all the other gifts have been distributed).
If you are charity-minded, drafting a will and including a gift is one of the most secure ways to ensure your wishes are fulfilled for those you leave behind.
Other Ways to Give
You might also want to consider giving some money or items to charity before death. Gifts will count towards the value of your estate if they are sizable. However, depending on when the gift was given, the tax rate may be less than 40%.
Gifts given at least 7 years before death incur no inheritance tax. If they are given within this time period, then they are subject to ‘taper relief,’ meaning inheritance tax may be less than 40%, depending on when it is given. These gifts can be given to charity, but they can also be given to members of your family or friends in need.
Baldwin & Robinson strives to make our clients’ lives a little easier by providing competent and compassionate legal services. We can draft your final documents to ensure your wishes are carried out, including gifts to charity, as well as guiding you through the probate process. We understand that drafting wills can be an intimidating and emotional process.
If you’d like to explore the possibility of continuing to give to charity well after you’re gone, we offer a free initial consultation. Contact Wayne on 01883 708155 or by email on firstname.lastname@example.org.