Leaving Money to Charity in Your Will

Gifts to charity in your will are exempt from inheritance tax entirely — every pound goes to the cause, none to HMRC. Less well known: a large enough charitable gift also cuts the tax rate on the rest of your estate. For some estates that means a bigger charity gift costs the family surprisingly little.

The 36% rule, in plain numbers

Leave at least 10% of your net estate (broadly, the estate above the nil-rate bands) to charity and the inheritance tax rate on the remainder drops from 40% to 36%. A rough illustration: on a £200,000 taxable slice, giving £20,000 to charity leaves £180,000 taxed at 36% (£64,800) instead of £200,000 at 40% (£80,000). The charity receives £20,000; the family gives up just £4,800 of inheritance. The closer your intended gift already is to 10%, the stronger the case for rounding it up — solicitors often draft the gift by formula ("such amount as qualifies the estate for the reduced rate") so the maths self-adjusts. The thresholds themselves are covered in our inheritance tax guide.

Ways to structure the gift

• A fixed sum ("£5,000 to Cancer Research UK") — simple, but inflation and a shrinking estate can distort your intentions over decades.
• A share of the residue ("10% of my residuary estate") — scales with whatever you actually leave, and is the natural fit for the 36% rule.
• Specific assets — shares or property can be left directly; charities are practised at receiving them.

Wording that avoids failed gifts

Charity gifts fail for avoidable reasons: name the charity precisely and include its registered charity number (names are similar; numbers are unique), and add a fallback — wording that lets executors pay a successor or similar charity if yours has merged or closed by the time you die. Charities' own legacy teams publish suggested wording, and any solicitor drafting a will (costs here) will include these safeguards as standard.

Free wills, in exchange for being asked

Many large charities fund free or discounted will-writing — Free Wills Month, Will Aid and charities' year-round schemes — hoping, but not requiring, that you leave them something. If a straightforward will is all you need, these schemes are a legitimate way to get one professionally drafted for nothing; the polite expectation is a legacy, and you remain entirely free to decide.

Family first, and saying why

Charitable gifts occasionally aggrieve family members, and large ones can attract challenges — particularly where a will was made late in life. If your gift is substantial relative to what family receives, a short letter with your will explaining the connection to the cause makes your intention harder to attack (see how wills get contested). And remember lifetime giving too: Gift Aid while you are alive gives the charity 25p per pound extra and can reduce your income tax — for some people, giving steadily now beats giving once at the end.

This is general information about the law in England and Wales, not personalised legal advice. Rules, thresholds and processes change, and Scotland and Northern Ireland have different rules in places — for anything that depends on your own circumstances, it is worth speaking to a solicitor (ideally one accredited by STEP or Solicitors for the Elderly) or checking GOV.UK and Citizens Advice for current detail.